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Paper eres2010_284:
LAND USE REGULATION & RETAIL: SPACE CONSTRAINTS AND TOTAL FACTOR PRODUCTIVITY

id eres2010_284
authors Cheshire, Paul; Hilber, Christian; Kaplanis, Ioannis
year 2010
title LAND USE REGULATION & RETAIL: SPACE CONSTRAINTS AND TOTAL FACTOR PRODUCTIVITY
source 17th Annual European Real Estate Society Conference in Milan, Italy
summary Introductory economics tells us there are three factors of production: land, labour and capital. Unless a student of agricultural economics, land as a factor of production will never be mentioned again. Yet space for some industries is a significant input and that would seem to be true of retailing. This is a sizable sector of the economy – on a reasonable measure of employment the second largest industry in the UK. Land use policies in the UK have the effect of restricting the availability of land for retail; in addition ‘town-centre-first’ policy concentrates retail development on expensive central land and so increases the cost of retail space. In British cities in the mid 1980s the most expensive land for retail was 250 times as expensive as the most expensive retail land in comparable US cities. This paper uses a unique micro data set of store specific information to estimate the impact on productivity of space and the specific effects of planning restrictiveness on the productivity of retailing. It is the first paper to analyse the contribution of space to productivity and to relate that firmly to land use regulation policies. Our results suggest that TFP rises with store size and that planning restrictiveness directly reduces productivity in retailing thereby increasing retail prices.
keywords Land use regulation, regulatory costs, firm productivity, retail
series ERES:conference
email p.cheshire@lse.ac.uk
more http://www.eres2010.org/index.asp?page=papers_download
content file.ppt (2,180,096 bytes)
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session Government Policy & Regulation in the Real Estate Sector (2)
last changed 2010/08/04 20:47
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