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We use hedonic techniques to show that water quality has a significant effect on property values along the Chesapeake Bay. Mindful of the limitations of using hedonic methods for welfare analysis, we calculate the potential benefits from an illustrative (but limited) water quality improvement. Past hedonic studies have almost entirely ignored the potential for omitted variables bias-the possibility that pollution sources, in addition to emitting undesirable substances, are likely to be unpleasant neighbors. We discuss the implications of this oversight, and we provide an application that addresses the problem head-on.

We investigate the dynamics and spatial distribution of land use fragmentation in a rapidly urbanizing region of the United States to test key propositions regarding the evolution of sprawl. Using selected pattern metrics and data from 1973 and 2000 for the state of Maryland, we find significant increases in developed and undeveloped land fragmentation but substantial spatial heterogeneity as well. Estimated fragmentation gradients that describe mean fragmentation as a function of distance from urban centers confirm the hypotheses that fragmentation rises and falls with distance and that the point of maximum fragmentation shifted outward over time. However, rather than outward increases in sprawl balanced by development infill, we find substantial and significant increases in mean fragmentation values along the entire urbanrural gradient. As demonstrated here, both the data and pattern measure used in their study are systematically biased against recording low-density residential development, the very land use that we find is most strongly associated with fragmentation. Other results demonstrate the association between exurban growth and increasing fragmentation and the systematic variation of fragmentation with nonurban factors. In particular, proximity to the Chesapeake Bay is negatively associated with fragmentation, suggesting that an attraction effect associated with this natural amenity has concentrated development.land use change ͉ landscape metrics ͉ spatial pattern ͉ urban gradient ͉ urbanization T he subject of urban sprawl-its prevalence, causes, and effects-has been hotly debated in the United States for several decades. For many, sprawl is a judgment about one or more aspects of excessive urban development, e.g., cities that are too extensive (1), employment that is too dispersed (2), or urban areas that are not sufficiently dense (3). A dearth of fine-scale land use data has prevented spatially explicit quantification of urban land use patterns beyond the extent of a single county or urban area. Yet it is precisely this fine-scale pattern with which the debate over sprawl and its impacts is principally concerned-the lack of contiguous residential development that increases public service costs; the spatial diffusion of households and jobs that magnifies traffic congestion and increases greenhouse gas emissions; and the fragmentation of undeveloped land that alters habitat, degrades natural resources, and eliminates functional open spaces. This paper is principally concerned with testing key propositions regarding the pattern and evolution of urban sprawl. To do so, we would ideally use highly detailed data for multiple regions of the United States. However, as we demonstrate in the next section, the only consistent data that are available at a spatially disaggregate level, the National Land Cover Dataset (NLCD), are systematically biased against recording low-density residential development, particularly in nonurban areas. Even if these data did record lowdensity urban land accurately, we would sti...

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