Examining for Evidence of the Leapfrog Effect in the Context of Strict Agricultural Zoning

While strict agricultural zoning policies, or greenbelts, are implemented to reduce urban sprawl, such policies may result in the leapfrog effect, which could cause sprawl to extend further. This paper outlines a theoretical explanation for the occurrence of the leapfrog effect due to development restrictions imposed by agricultural zoning. This theory is then applied empirically to a setting where agricultural zoning has been implemented: Ontario's Greenbelt. The results provide evidence that the leapfrog effect has occurred around the Greenbelt, as farmland values just beyond the outer boundary have increased. Extensive sensitivity analysis supports this result. (JEL Q15, R52)