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Office space supply restrictions in Britain: the political economy of market revenge

Cheshire, Paul and Hilber, Christian A.L. (2007) Office space supply restrictions in Britain: the political economy of market revenge. London School of Economics, London, UK. (Unpublished)

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Office space in Britain is the most expensive in the world and regulatory constraints are the obvious explanation. We estimate the ‘regulatory tax’ for 14 British office locations from 1961 to 2005. These are orders of magnitude greater than estimates for Manhattan condominiums or office space in continental Europe. Exploiting the panel data, we provide strong support for our hypothesis that the regulatory tax varies according to whether an area is controlled by business interests or residents. Our results imply that the cost of the 1990 change converting commercial property taxes from a local to a national basis – transparently removing any fiscal incentive to permit local development – exceeded any plausible rise in local property taxes.

Item Type: Monograph (Working Paper)
Official URL:
Additional Information: © 2007 The Authors
Library of Congress subject classification: H Social Sciences > HD Industries. Land use. Labor > HD100 Land Use
Journal of Economic Literature Classification System: R - Urban, Rural, and Regional Economics > R5 - Regional Government Analysis > R52 - Land Use and Other Regulations
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies
H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q1 - Agriculture > Q15 - Land Ownership and Tenure; Land Reform; Land Use; Irrigation
Sets: Departments > Geography and Environment
Date Deposited: 28 Jan 2008

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