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Trophy architects and design as rent-seeking: quantifying deadweight losses in a tightly regulated office market

Cheshire, Paul and Dericks, Gerard (2020) Trophy architects and design as rent-seeking: quantifying deadweight losses in a tightly regulated office market. Economica. ISSN 0013-0427

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Identification Number: 10.1111/ecca.12339

Abstract

Britain tightly restricts the supply of office space, creating substantial economic rents, but its development restrictions are politically administered and therefore gameable, inducing rent-seeking activity. We find that ‘trophy architects’ (TAs)—prior winners of a lifetime achievement award—obtain more space on a given site apparently by signalling architectural merit. Analysis of 2039 office buildings shows that TAs build 14 stories taller, thereby increasing a representative site value by 152% and capturing potential economic rents of £148m. However, we argue that this apparent premium is merely compensation for the extra costs, risks and delays of using a TA to game the planning system; it is therefore an indirect measure of the deadweight costs of this form of rent-seeking.

Item Type: Article
Official URL: https://onlinelibrary.wiley.com/journal/14680335
Additional Information: © 2020 The London School of Economics and Political Science
Divisions: Geography & Environment
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
Date Deposited: 20 Jan 2020 15:15
Last Modified: 28 Jul 2020 08:48
URI: http://eprints.lse.ac.uk/id/eprint/103134

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