Land Use Regulation as a Barrier to Entry: Evidence from the Texas Lodging Industry
AbstractThis paper examines the anticompetitive effects of land use regulation using microdata on mid-scale chain hotels in Texas. I construct a dynamic entry-exit model that endogenizes hotel chains' reactions to land use regulation. Estimation results indicate that imposing stringent regulation increases costs considerably. Hotel chains nonetheless enter highly regulated markets even if entry probabilities are lower, anticipating fewer rivals and hence greater market power. Consumers incur the costs of regulation indirectly in the form of high prices.
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Bibliographic InfoPaper provided by University of Toronto, Department of Economics in its series Working Papers with number tecipa-412.
Length: 48 pages
Date of creation: 21 Oct 2010
Date of revision:
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Land use regulation; firms\' 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-400, University of Toronto, Department of Economics.
- R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, 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-2010-10-30 (Agricultural Economics)
- NEP-ALL-2010-10-30 (All new papers)
- NEP-COM-2010-10-30 (Industrial Competition)
- NEP-REG-2010-10-30 (Regulation)
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