Land Use Regulation as a Barrier to Entry: Evidence from the Texas Lodging Industry
AbstractI empirically examines the anticompetitive effects of land use regulation by using microdata on midscale chain hotels in Texas. I construct a dynamic entry-exit model of midscale hotel chains. By endogenizing their entry decisions, the model explicitly considers hotel chains' reactions to the stringency of land use regulation. Estimation results indicate that imposing stringent regulation increases cost enough to affect hotel chains' entry decisions. Although hotel chains are the immediate payers of the increased entry cost, incumbents shift a part of their cost increase onto consumers by exploiting their increased market power. (JEL: R3, L1, L5)
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Bibliographic InfoPaper provided by University of Toronto, Department of Economics in its series Working Papers with number tecipa-400.
Length: 45 pages
Date of creation: 01 Apr 2010
Date of revision:
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Land use regulation; zoning; barrier to entry; lodging industry;
Other versions of this item:
- Junichi Suzuki, 2013. "Land Use Regulation As A Barrier To Entry: Evidence From The Texas Lodging Industry," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(2), pages 495-523, 05.
- Junichi Suzuki, 2010. "Land Use Regulation as a Barrier to Entry: Evidence from the Texas Lodging Industry," Working Papers tecipa-412, University of Toronto, Department of Economics.
- R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L5 - Industrial Organization - - Regulation and Industrial Policy
This paper has been announced in the following NEP Reports:
- NEP-AGR-2010-04-11 (Agricultural Economics)
- NEP-ALL-2010-04-11 (All new papers)
- NEP-COM-2010-04-11 (Industrial Competition)
- NEP-REG-2010-04-11 (Regulation)
- NEP-URE-2010-04-11 (Urban & Real Estate Economics)
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