Model-based derivation of trends and interdependencies relating to land use for settlement and transport provides a strong foundation for examining issues around the future of land use and evaluating policy options. The model PANTA RHEI REGIO models changes in land use for settlement and transport as a result of demographic and economic factors at the district (Kreis/kreisfreie Stadt) level in Germany. Establishing a sound empirical foundation for this econometric model, in part based on land use statistics, was essential groundwork for implementing and refining the model.

The foundations of the model lie in identifying predominantly demand-related factors (e.g. changes in purchasing power, economic growth, structural changes in specific sectors, demographics, including emigration and immigration) and price factors and linking them to expected macroeconomic and regional developments.

Integration of the model into the PANTA RHEI environmental economics model or the INFORGE model, which is the core economic model for PANTA RHEI, allows model-based analysis and projections of settlement development. As a result, PANTA RHEI REGIO is able to draw on a highly comprehensive and detailed set of economic data both historically and for projections.

Demographic developments are a core externally-defined constraint on the system. The initial hypothesis for empirical work is that, in addition to supply-side factors, land use is also determined by demand from the housing sector (housing preferences and demographics), land requirements for business, increases in transport services and changes in land prices.

With reference to the model’s philosophy and structure, it is worth stressing that land use in terms both of area and of different usage types for land used for settlement and transport is the result of an explicitly bottom-up structure.