Our results also have several implications for place-based policies. We start with the evidence on agglomeration economies. A vast number of subsidies is given to attract firms to certain regions (Greenstone et al., 2012). An example is the policy to attract and maintain headquarters of multinational enterprises in the Netherlands. These policies are justified if there are substantial agglomeration externalities, so that the money invested to attract one firm will have substantial wider economic benefits. Our results in Chapters 2, 3, 4 and 5 show that agglomeration economies are important. This may suggest that policies that aim to attract firms improve welfare because of agglomeration economies, but this conclusion is difficult to verify: i.e. if a certain municipality attracts a certain firm, another municipality will lose that firm and the related benefits. Nevertheless, we can learn something from the evidence on agglomeration economies. First, in Chapter 3 we showed that agglomeration economies seem to be much more pronounced in urban areas. This suggests that subsidies aiming at attracting firms to deprived rural density may be inefficient because positive agglomeration externalities are absent in these places. Second, Chapter 4 shows that within-building agglomeration economies are likely important. This suggests that if municipalities should stimulate construction, they should encourage the construction of relatively tall buildings. Municipalities should also reconsider and relax limitations on building heights. Third, in Chapter 5 we highlight that policies that aim at attracting multinational enterprises may yield external benefits through the births of knowledge intensive business services, although the effect is relatively small. Fourth, we show in Chapters 2 and 7 that household density is generally valued negatively, likely because of negative crowding effects (e.g. less access to open space). This is bad news for planning policies, such as Transit Oriented Development and Smart Growth, which aim at increasing (household) densities near nodes of public transports.
Our evidence on the importance of amenities also leads to policy recommendations. First, from Chapter 8 it may be concluded that the physical side of cities, and therefore history, leads to sorting of households over space. Policy makers should be aware of the fact that long-term national policies that stimulate preservation of historical buildings in specific cities may have large spatial effects and may cause social segregation, as high income households are attracted disproportionally by historic amenities. Chapter 9 also highlights that the house owners’ costs of regulatory restrictions may be large. Policies aiming at protecting historic amenities should be aware of this and should only protect cultural heritage that yields sufficient benefits for house owners. Third, we showed that the urban fabric is valued by house owners: planning policies that stimulate mixed land use may increase house prices, given that land uses are compatible.
This dissertation also analyse the impact of accessibility, in particular access by public transport. Many planning policies aim to fight traffic congestion and reduce automobile dependency by investing in public transport. For example, Transit Oriented Development aims at a development of a high-quality public transport system together with development of mixed use neighbourhoods around stations. We find little evidence for positive accessibility benefits of new stations, which makes it harder to justify huge investments in the opening of new stations. The evidence also questions the strong focus of planning concepts like Transit Oriented Development on new development around public transport nodes.