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Evidence from a UK supermarket chain

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Author Info

  • Paul C. Cheshire

    ()
    (London School of Economics)

  • Christian A. L. Hilber

    ()
    (London School of Economics & Spatial Economics Research Centre (SERC))

  • Ioannis Kaplanis

    ()
    (Universitat Rovira i Virgili & Spatial Economics Research Centre (SERC))

Abstract

We use unique store-specific data for a major UK supermarket chain to estimate the impact of planning, which restricts both the size and location of stores, on store output. Using the quasi-natural experiment of the variation in planning policies between England and other UK countries and a difference-in-difference approach, we isolate the impact of Town Centre First (TCF) policies. We find that space contributes directly to the productivity of stores and planning policies in England directly reduce output both by reducing store sizes and forcing stores onto less productive sites. Our results suggest that since the late 1980s planning policies have imposed a loss of total output of at least 18.3 to 24.9%. This is equivalent to more than a ‘lost decade’ of output growth in a major sector generated directly by government policy.

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Bibliographic Info

Paper provided by Institut d'Economia de Barcelona (IEB) in its series Working Papers with number 2012/15.

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Length: 49 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:ieb:wpaper:2012/5/doc2012-15

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Related research

Keywords: Land use regulation; regulatory costs; firm productivity; retail;

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References

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  1. Haskel, Jonathan & Sadun, Raffaella, 2009. "Regulation and UK Retailing Productivity: Evidence from Micro Data," CEPR Discussion Papers 7140, C.E.P.R. Discussion Papers.
  2. Griffith, Rachel & Harmgart, Heike, 2008. "Supermarkets and Planning Regulation," CEPR Discussion Papers 6713, C.E.P.R. Discussion Papers.
  3. Paul Cheshire & Christian A.L. Hilber, 2008. "Office space supply restrictions in Britain: the political economy of market revenge," LSE Research Online Documents on Economics 4372, London School of Economics and Political Science, LSE Library.
  4. Paul Cheshire & Christian A. L. Hilber & Ioannis Kaplanis, 2011. "Evaluating the Effects of Planning Policies on the Retail Sector: Or do Town Centre First Policies Deliver the Goods?," SERC Discussion Papers 0066, Spatial Economics Research Centre, LSE.
  5. Fabiano Schivardi & Eliana Viviano, 2010. "Entry Barriers in Retail Trade," Working Papers CELEG 1003, Dipartimento di Economia e Finanza, LUISS Guido Carli.
  6. Lucia Foster & John Haltiwanger & C.J. Krizan, 2002. "The Link Between Aggregate and Micro Productivity Growth: Evidence from Retail Trade," NBER Working Papers 9120, National Bureau of Economic Research, Inc.
  7. Raffaella Sadun, 2014. "Does Planning Regulation Protect Independent Retailers?," NBER Working Papers 19797, National Bureau of Economic Research, Inc.
  8. David R. Bell & Christian A.L. Hilber, 2004. "An Empirical Test of the Theory of Sales: Do Household Storage Costs Affect Consumer and Store Behavior?," Working Papers 05-23, Utrecht School of Economics.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Yes, planning law is red tape that we want to get rid of
    by tim in The Pin Factory Blog on 2012-05-27 06:00:30

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