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Regulatory Barriers to the Diffusion of Innovation: Some Evidence from Building Codes

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  • Sharon M. Oster
  • John M. Quigley

Abstract

Previous studies, including the reports of the Douglas and Kaiser Commission, have suggested that outmoded local regulation of residential construction has impeded technical progress in the industry. In this paper, we try to identify the determinants of differences across communities in these regulations. The permissibility of four particular innovations in a cross section of jurisdictions in 1970 and the timing of these innovations are explained by attributes of local firms, labor unions, building officials, and housing demand. Our results suggest that the educational level of the chief building official, the extent of unionization, and the relative size of housebuilding firms in an area affect the diffusion of innovations in residential construction.

Suggested Citation

  • Sharon M. Oster & John M. Quigley, 1977. "Regulatory Barriers to the Diffusion of Innovation: Some Evidence from Building Codes," Bell Journal of Economics, The RAND Corporation, vol. 8(2), pages 361-377, Autumn.
    • Handle: RePEc:rje:bellje:v:8:y:1977:i:autumn:p:361-377
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    Cited by:

    1. Geroski, P. A., 2000. "Models of technology diffusion," Research Policy, Elsevier, vol. 29(4-5), pages 603-625, April.
    2. Mueller, Steffen, 2006. "Missing the spark: An investigation into the low adoption paradox of combined heat and power technologies," Energy Policy, Elsevier, vol. 34(17), pages 3153-3164, November.
    3. Gyourko, Joseph & Molloy, Raven, 2015. "Regulation and Housing Supply," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1289-1337, Elsevier.
    4. Carolyn A. Dehring & Martin Halek, 2013. "Coastal Building Codes and Hurricane Damage," Land Economics, University of Wisconsin Press, vol. 89(4), pages 597-613.
    5. Garrett, Vicki & Koontz, Tomas M., 2008. "Breaking the cycle: Producer and consumer perspectives on the non-adoption of passive solar housing in the US," Energy Policy, Elsevier, vol. 36(4), pages 1551-1566, April.
    6. Dennis W. Carlton & Jeffrey M. Perloff, 1989. "The Economics of Information," Food Marketing Policy Center Research Reports 005, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    7. Thomas J. Holmes & James A. Schmitz, 1995. "Resistance to new technology and trade between areas," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 19(Win), pages 2-17.
    8. Carolyn A. Dehring, 2006. "Building Codes and Land Values in High Hazard Areas," Land Economics, University of Wisconsin Press, vol. 82(4), pages 513-528.
    9. Thomas J. Holmes & James A. Schmitz, 1994. "Resistance to technology and trade between areas," Staff Report 184, Federal Reserve Bank of Minneapolis.
    10. Zhang, Li & Wu, Jing & Liu, Hongyu, 2018. "Policies to enhance the drivers of green housing development in China," Energy Policy, Elsevier, vol. 121(C), pages 225-235.
    11. Orbach Yair & Fruchter Gila E. & Varsano Naor, 2019. "Taking a Ride on Mature Carrier Products to Push a New Technology: The Diffusion of Add-Ons," Review of Marketing Science, De Gruyter, vol. 17(1), pages 23-46, June.
    12. Randy Dumm & G. Sirmans & Greg Smersh, 2011. "The Capitalization of Building Codes in House Prices," The Journal of Real Estate Finance and Economics, Springer, vol. 42(1), pages 30-50, January.
    13. Emily Oster & Rebecca Thornton, 2012. "Determinants Of Technology Adoption: Peer Effects In Menstrual Cup Take-Up," Journal of the European Economic Association, European Economic Association, vol. 10(6), pages 1263-1293, December.
    14. Kimmel, Shawn C. & Toohey, Nathan M. & Delborne, Jason A., 2016. "Roadblocks to responsible innovation: Exploring technology assessment and adoption in U.S. public highway construction," Technology in Society, Elsevier, vol. 44(C), pages 66-77.
    15. Martin Jakob & Reinhard Madlener, 2003. "Exploring Experience Curves for the Building Envelope: An Investigation for Switzerland for 1970–2020," CEPE Working paper series 03-22, CEPE Center for Energy Policy and Economics, ETH Zurich.
    16. Wang, Chunhua, 2014. "Regulating land development in a natural disaster-prone area: The roles of building codes," Resource and Energy Economics, Elsevier, vol. 36(1), pages 209-228.
    17. Holmes, Thomas J. & Jr., James A. Schmitz, 2001. "A gain from trade: From unproductive to productive entrepreneurship," Journal of Monetary Economics, Elsevier, vol. 47(2), pages 417-446, April.
    18. Strong, Derek Ryan, 2017. "The Early Diffusion of Smart Meters in the US Electric Power Industry," Thesis Commons 7zprk, Center for Open Science.
    19. Tedi Skiti, 2020. "Institutional entry barriers and spatial technology diffusion: Evidence from the broadband industry," Strategic Management Journal, Wiley Blackwell, vol. 41(7), pages 1336-1361, July.
    20. Brown, Austin R. & Wood, Matthew S. & Scheaf, David J., 2022. "Discovery sells, but who’s buying? An empirical investigation of entrepreneurs’ technology license decisions," Journal of Business Research, Elsevier, vol. 144(C), pages 403-415.
    21. Eli Noam, 1985. "A local regulator's rewards for conformity in policy," Public Choice, Springer, vol. 45(3), pages 291-302, January.
    22. Nils Kok & Marquise McGraw & John Quigley, 2012. "The diffusion over time and space of energy efficiency in building," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(2), pages 541-564, April.
    23. Bonnin Roca, Jaime & O'Sullivan, Eoin, 2022. "The role of regulators in mitigating uncertainty within the Valley of Death," Technovation, Elsevier, vol. 109(C).

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