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Blue Laws

Author

Listed:
  • Michael C Burda

    (Institut für Wirtschaftstheorie)

  • Philippe Weil

Abstract

This paper investigates the economics of ”blue laws” or restrictions on shop-opening hours, most commonly imposed on Sunday trading. We show that in the presence of communal leisure or ”ruinous competition” externalities, retail regulations can have real effects in a simple general equilibrium model. We look for these effects in a panel of US states and in individual CPS data. An instrumental variable approach identifies the effects to the extent that blue laws are endogenous. We find that blue laws 1) reduce relative employment, 2) raise annual compensation and labor productivity, and 3) depress prices in the retail sector. The primary mechanism appears to be a reduction of part-time employment.

Suggested Citation

  • Michael C Burda & Philippe Weil, 2004. "Blue Laws," Sciences Po publications info:hdl:2441/8843, Sciences Po.
  • Handle: RePEc:spo:wpmain:info:hdl:2441/8843
    as

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    File URL: http://spire.sciencespo.fr/hdl:/2441/8843/resources/burda.pdf
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    References listed on IDEAS

    as
    1. Clemenz, Gerhard, 1990. "Non-sequential consumer search and the consequences of a deregulation of trading hours," European Economic Review, Elsevier, vol. 34(7), pages 1323-1337, November.
    2. Sanyal, Kalyan K & Jones, Ronald W, 1982. "The Theory of Trade in Middle Products," American Economic Review, American Economic Association, vol. 72(1), pages 16-31, March.
    3. Raymond Gradus, 1996. "The economic effects of extending shop opening hours," Journal of Economics, Springer, vol. 64(3), pages 247-263, October.
    4. Tanguay, Georges & Vallee, Luc & Lanoie, Paul, 1995. "Shopping Hours and Price Levels in the Retailing Industry: A Theoretical and Empirical Analysis," Economic Inquiry, Western Economic Association International, vol. 33(3), pages 516-524, July.
    5. Thum, Marcel & Weichenrieder, Alfons, 1997. "'Dinkies' and Housewives: The Regulation of Shopping Hours," Kyklos, Wiley Blackwell, vol. 50(4), pages 539-559.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Mehr als Bratwurst und Cervelat
      by Monika Bütler in BATZ.ch on 2013-09-14 17:34:00

    More about this item

    Keywords

    blue laws; shop opening regulations; retail trade; employment;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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