This paper examines the diffusion of land use regulation among Swiss municipalities. Due to enormous development pressures originating from the big cities, we expect strong neighboring effects with respect to the diffusion of land use regulation among municipalities. We basically expect stronger prescriptions about building densities and the containment of the settlement area spreading in more or less concentric circles from more central to less central areas. However, the pattern of neighboring effects is likely to be more complicated, since some periurban municipalities will try to resist the pressure to increase density and containment regulations in order to remain attractive for high-income inhabitants. The naive expectation of diffusion effects from geographical proximity might also be disturbed by networks of transport infrastructure and its use by commuters that connect municipalities not being immediate neighbors. We employ a "m-star" spatial panel regression model that allows differentiating neighboring form network effects.
