This article presents a polychotomous choice-selectivity model to estimate the interactions among urbanization, land use regulations, and public finance in five western states (California, Idaho, Nevada, Oregon, and Washington). Land use regulations in these five states reduced the total developed area by an estimated 12.2% from 1982 to 1992, but increased housing prices between 1.3% and 4.7%, depending on the intensity of land use regulations in a county. Land use regulations also reduced public expenditure and property tax in the long run by 5.6% and 8.4%, respectively, but increased public expenditure and property tax in the short run by 9.8% and 12.6%.