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Land use regulation and productivity - Land matters: Evidence from a UK Supermarket chain

  • Cheshire, Paul C.
  • Hilber, Christian
  • Kaplanis, Ioannis

We use store-specific data for a major UK supermarket chain to estimate the impact of planning on store output. Using the quasi-natural experiment of the variation in policies between England and other UK countries, we isolate the impact of Town Centre First policies. We find that space contributes directly to store productivity; and planning policies in England directly reduce output both by reducing store sizes and forcing stores onto less productive sites. We estimate that since the late 1980s planning policies have imposed a loss of output of at least 18.3 to 24.9% - more than a “lost decade’s†growth. JEL codes: D2, L51, L81, R32.

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Paper provided by Universitat Rovira i Virgili, Department of Economics in its series Working Papers with number 2072/196650.

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Date of creation: 2012
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Handle: RePEc:urv:wpaper:2072/196650
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  1. Marianne Bertrand & Francis Kramarz, 2001. "Does Entry Regulation Hinder Job Creation? Evidence from the French Retail Industry," NBER Working Papers 8211, National Bureau of Economic Research, Inc.
  2. Fabiano Schivardi & Eliana Viviano, 2008. "Entry Barriers in Retail Trade," EIEF Working Papers Series 0814, Einaudi Institute for Economics and Finance (EIEF), revised Jul 2008.
  3. Richard K. Green & Stephen Malpezzi & Stephen K. Mayo, 2005. "Metropolitan-Specific Estimates of the Price Elasticity of Supply of Housing, and Their Sources," American Economic Review, American Economic Association, vol. 95(2), pages 334-339, May.
  4. C.J. Krizan & John Haltiwanger & Lucia Foster, 2002. "The Link Between Aggregate and Micro Productivity Growth: Evidence from Retail Trade," Working Papers 02-18, Center for Economic Studies, U.S. Census Bureau.
  5. Christian A. L. Hilber & Frédéric Robert-Nicoud, 2010. "On the origins of land use regulations: theory and evidence from us metro areas," Working Papers 2010/33, Institut d'Economia de Barcelona (IEB).
  6. Raffaella Sadun, 2014. "Does Planning Regulation Protect Independent Retailers?," NBER Working Papers 19797, National Bureau of Economic Research, Inc.
  7. Haskel, Jonathan & Sadun, Raffaella, 2009. "Regulation and UK Retailing Productivity: Evidence from Micro Data," CEPR Discussion Papers 7140, C.E.P.R. Discussion Papers.
  8. Paul Cheshire & Christian A. L. Hilber & Ioannis Kaplanis, 2011. "Evaluating the effects of planning policies on the retail sector: or do town centre first policies deliver the goods?," LSE Research Online Documents on Economics 31757, London School of Economics and Political Science, LSE Library.
  9. Beata K. Smarzynska, 2003. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers through Backward Linkages," William Davidson Institute Working Papers Series 548, William Davidson Institute at the University of Michigan.
  10. Paul Cheshire & Christian Hilber, 2007. "Office Space Supply Restrictions in Britain: The Political Economy of Market Revenge," ERES eres2007_119, European Real Estate Society (ERES).
  11. David Bell & Christian Hilber, 2006. "An empirical test of the Theory of Sales: Do household storage constraints affect consumer and store behavior?," Quantitative Marketing and Economics (QME), Springer, vol. 4(2), pages 87-117, June.
  12. Zvi Griliches & Jacques Mairesse, 1995. "Production Functions: The Search for Identification," Harvard Institute of Economic Research Working Papers 1719, Harvard - Institute of Economic Research.
  13. Griffith, Rachel & Harmgart, Heike, 2008. "Supermarkets and Planning Regulation," CEPR Discussion Papers 6713, C.E.P.R. Discussion Papers.
  14. Rachel Griffith & Heike Harmgart, 2005. "Retail productivity," IFS Working Papers W05/07, Institute for Fiscal Studies.
  15. Albert Saiz, 2010. "The Geographic Determinants of Housing Supply," The Quarterly Journal of Economics, Oxford University Press, vol. 125(3), pages 1253-1296.
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