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, 87 (348). 1078 - 1104. ISSN 0013-0427

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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:	18 Oct 2024 17:06
URI:	http://eprints.lse.ac.uk/id/eprint/103134

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