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Evaluating the effects of planning policies on the retail sector: or do town centre first policies deliver the goods?

Cheshire, Paul, Hilber, Christian A. L. and Kaplanis, Ioannis (2011) Evaluating the effects of planning policies on the retail sector: or do town centre first policies deliver the goods? SERC Discussion Papers, SERCDP0066. Spatial Economics Research Centre, London School of Economics and Political Science, London, UK.

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Abstract

Few studies conceive of land as a productive factor but British land use policies may lower total factor productivity (TFP) in the retailing industry by (i) restricting the total availability of land for retail, thereby increasing space costs (ii) directly limiting store size and (iii) concentrating retail development on specific central locations. We use unique store-specific data to estimate the impact of space on retail productivity and the specific effects of planning restrictiveness and micromanagement of store locations. We use the quasi natural experiment generated by the variation in planning policies between England, Wales, Scotland and Northern Ireland to isolate the impact of town centre first policies. We find that TFP rises with store size and that planning policy directly reduces productivity both by reducing store sizes and forcing retail onto less productive sites. Our results, while they strictly only apply to the supermarket group whose data we analyse, are likely to be representative of supermarkets in general and suggest that since the late 1980s planning policies have imposed a loss of TFP of at least 20%.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.spatialeconomics.ac.uk/SERC/publication...
Additional Information: © 2011 The Authors
Library of Congress subject classification: H Social Sciences > HF Commerce
J Political Science > JS Local government Municipal government
Journal of Economic Literature Classification System: D - Microeconomics > D2 - Production and Organizations
L - Industrial Organization > L5 - Regulation and Industrial Policy > L51 - Economics of Regulation
L - Industrial Organization > L8 - Industry Studies: Services > L81 - Retail and Wholesale Trade; Warehousing; e-Commerce
R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R32 - Other Production and Pricing Analysis
Sets: Departments > Geography and Environment
Research centres and groups > Spatial Economics Research Centre
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: SERCDP0066
Date Deposited: 27 Jan 2011 10:53
URL: http://eprints.lse.ac.uk/31757/

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