IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/120113.html
   My bibliography  Save this paper

Quantitative evaluation of benefits of place-based policies for retail agglomeration

Author

Listed:
  • Aizawa, Hiroki
  • Kono, Tatsuhito

Abstract

Local governments have recently adopted place-based policies in order to revitalize decayed shopping areas in downtown areas. Developing a multipurpose shopping model, we quantitatively evaluate the welfare impacts of place-based policies for downtown retail agglomeration. In the model, retail stores are under monopolistic competition, and households are free to choose where to reside. Results show that, whether or not place-based policies are efficient depends on the recipients of government subsidies, even if the policies promote retail agglomeration in downtown areas. We show that the total benefits of location subsidies to households and location subsidies to stores are 566 and −342 million JPY per year, respectively.

Suggested Citation

  • Aizawa, Hiroki & Kono, Tatsuhito, 2024. "Quantitative evaluation of benefits of place-based policies for retail agglomeration," MPRA Paper 120113, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:120113
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/120113/1/MPRA_paper_120113.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Brueckner, Jan K., 2007. "Urban growth boundaries: An effective second-best remedy for unpriced traffic congestion?," Journal of Housing Economics, Elsevier, vol. 16(3-4), pages 263-273, November.
    2. Peter Davis, 2006. "Spatial competition in retail markets: movie theaters," RAND Journal of Economics, The RAND Corporation, vol. 37(4), pages 964-982, December.
    3. Henkel, Joachim & Stahl, Konrad & Walz, Uwe, 2000. "Coalition Building in a Spatial Economy," Journal of Urban Economics, Elsevier, vol. 47(1), pages 136-163, January.
    4. Tabuchi, Takatoshi, 2009. "Self-organizing marketplaces," Journal of Urban Economics, Elsevier, vol. 66(3), pages 179-185, November.
    5. Ushchev, Philip & Sloev, Igor & Thisse, Jacques-François, 2015. "Do we go shopping downtown or in the ‘burbs?," Journal of Urban Economics, Elsevier, vol. 85(C), pages 1-15.
    6. Tatsuhito Kono & Hisa Morisugi & Fumi Miyahara, 2007. "Congestion deterioration and transportation project evaluation," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 41(1), pages 145-170, March.
    7. Koster, Hans R.A. & Pasidis, Ilias & van Ommeren, Jos, 2019. "Shopping externalities and retail concentration: Evidence from dutch shopping streets," Journal of Urban Economics, Elsevier, vol. 114(C).
    8. Matias Busso & Jesse Gregory & Patrick Kline, 2013. "Assessing the Incidence and Efficiency of a Prominent Place Based Policy," American Economic Review, American Economic Association, vol. 103(2), pages 897-947, April.
    9. Paolo Bertoletti & Federico Etro & Ina Simonovska, 2018. "International Trade with Indirect Additivity," American Economic Journal: Microeconomics, American Economic Association, vol. 10(2), pages 1-57, May.
    10. Costas Arkolakis & Arnaud Costinot & Dave Donaldson & Andrés Rodríguez-Clare, 2019. "The Elusive Pro-Competitive Effects of Trade," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(1), pages 46-80.
    11. Peter Davis, 2006. "Spatial competition in retail markets: movie theaters," RAND Journal of Economics, RAND Corporation, vol. 37(4), pages 964-982, December.
    12. Aizawa, Hiroki & Kono, Tatsuhito, 2023. "How should place-based policies be designed to efficiently promote retail agglomeration?," MPRA Paper 117055, University Library of Munich, Germany.
    13. Robin W. Boadway & Frank R. Flatters, 1982. "Efficiency and Equalization Payments in a Federal System of Government: A Synthesis and Extension of Recent Results," Canadian Journal of Economics, Canadian Economics Association, vol. 15(4), pages 613-633, November.
    14. Givord, Pauline & Rathelot, Roland & Sillard, Patrick, 2013. "Place-based tax exemptions and displacement effects: An evaluation of the Zones Franches Urbaines program," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 151-163.
    15. Kiyoshi Arakawa, 2006. "A Model Of Shopping Centers," Journal of Regional Science, Wiley Blackwell, vol. 46(5), pages 969-990, December.
    16. Stefano DellaVigna & Matthew Gentzkow, 2019. "Uniform Pricing in U.S. Retail Chains," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(4), pages 2011-2084.
    17. Domon, Shohei & Hirota, Mayu & Kono, Tatsuhito & Managi, Shunsuke & Matsuki, Yusuke, 2022. "The long-run effects of congestion tolls, carbon tax, and land use regulations on urban CO2 emissions," Regional Science and Urban Economics, Elsevier, vol. 92(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aizawa, Hiroki & Kono, Tatsuhito, 2023. "How should place-based policies be designed to efficiently promote retail agglomeration?," MPRA Paper 117055, University Library of Munich, Germany.
    2. Ali Goli & Pradeep K. Chintagunta, 2021. "What Happens When a Retailer Drops a Product Category? Investigating the Consequences of Ending Tobacco Sales," Marketing Science, INFORMS, vol. 40(6), pages 1169-1198, November.
    3. Yang Li & Brett R. Gordon & Oded Netzer, 2018. "An Empirical Study of National vs. Local Pricing by Chain Stores Under Competition," Marketing Science, INFORMS, vol. 37(5), pages 812-837, September.
    4. NAKAJIMA Kentaro & TESHIMA Kensuke, 2018. "Identifying Neighborhood Effects among Firms: Evidence from location lotteries of the Tokyo Tsukiji fish market," Discussion papers 18044, Research Institute of Economy, Trade and Industry (RIETI).
    5. Kishi, Akio & Kono, Tatsuhito, 2020. "Transportation Improvement and Hollowing-out of Urban Commercial Center: Do They Harm Consumer Welfare?," MPRA Paper 99247, University Library of Munich, Germany.
    6. Zhou, Li, 2012. "Commercial Revitalization in Low-Income Urban Communities: General Tax Incentives vs. Direct Incentives to Developers," Working Papers 2012-4, University of Alberta, Department of Economics.
    7. Yufeng Huang & Bart J. Bronnenberg, 2023. "Consumer Transportation Costs and the Value of E-Commerce: Evidence from the Dutch Apparel Industry," Marketing Science, INFORMS, vol. 42(5), pages 984-1003, September.
    8. Gibbons, Stephen & Overman, Henry & Sarvimäki, Matti, 2021. "The local economic impacts of regeneration projects: Evidence from UK's single regeneration budget," Journal of Urban Economics, Elsevier, vol. 122(C).
    9. Kelemen, József, 2020. "Szimultán Hotelling-modell Cobb-Douglas-hasznosságfüggvénnyel [A simultaneous Hotelling model with a Cobb-Douglas utility function]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 14-30.
    10. Laura Nurski & Frank Verboven, 2016. "Exclusive Dealing as a Barrier to Entry? Evidence from Automobiles," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 83(3), pages 1156-1188.
    11. Hasan, Rana & Jiang, Yi & Rafols, Radine Michelle, 2021. "Place-based preferential tax policy and industrial development: Evidence from India’s program on industrially backward districts," Journal of Development Economics, Elsevier, vol. 150(C).
    12. Etro, Federico, 2017. "The Heckscher–Ohlin model with monopolistic competition and general preferences," Economics Letters, Elsevier, vol. 158(C), pages 26-29.
    13. Givord, Pauline & Quantin, Simon & Trevien, Corentin, 2018. "A long-term evaluation of the first generation of French urban enterprise zones," Journal of Urban Economics, Elsevier, vol. 105(C), pages 149-161.
    14. Amit Pazgal & David Soberman & Raphael Thomadsen, 2016. "Maximal or Minimal Differentiation in a Hotelling Market? A Fresh Perspective," Customer Needs and Solutions, Springer;Institute for Sustainable Innovation and Growth (iSIG), vol. 3(1), pages 42-47, March.
    15. Luca Aguzzoni & Elena Argentesi & Lorenzo Ciari & Tomaso Duso & Massimo Tognoni, 2016. "Ex post Merger Evaluation in the U.K. Retail Market for Books," Journal of Industrial Economics, Wiley Blackwell, vol. 64(1), pages 170-200, March.
    16. Shaoling Chen & Susheng Wang & Haisheng Yang, 2015. "Spatial Competition and Interdependence in Strategic Decisions: Empirical Evidence from Franchising," Economic Geography, Clark University, vol. 91(2), pages 165-204, April.
    17. Anthony Briant & Miren Lafourcade & Benoît Schmutz, 2015. "Can Tax Breaks Beat Geography? Lessons from the French Enterprise Zone Experience," American Economic Journal: Economic Policy, American Economic Association, vol. 7(2), pages 88-124, May.
    18. Peter Davis & Pasquale Schiraldi, 2014. "The flexible coefficient multinomial logit (FC-MNL) model of demand for differentiated products," RAND Journal of Economics, RAND Corporation, vol. 45(1), pages 32-63, March.
    19. Manon Garrouste & Miren Lafourcade, 2022. "Place-Based Policies: Opportunity for Deprived Schools or Zone-and-Shame Effect?," Post-Print hal-04329793, HAL.
    20. Martin Lábaj & Karol Morvay & Peter Silaniè & Christoph Weiss, 2014. "Market Structure in Transition: Entry and Competition in Slovakia," Department of Economic Policy Working Paper Series 005, Department of Economic Policy, Faculty of National Economy, University of Economics in Bratislava.

    More about this item

    Keywords

    Agglomeration; Monopolistic competition; Multipurpose shopping; Place-based policy.;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:120113. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.