Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/119119
Authors: 
Cheshire, Paul
Hilber, Christian
Kaplanis, Ioannis
Year of Publication: 
2010
Series/Report no.: 
50th Congress of the European Regional Science Association: "Sustainable Regional Growth and Development in the Creative Knowledge Economy", 19-23 August 2010, Jönköping, Sweden
Abstract: 
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.
Subjects: 
Land use regulation
regulatory costs
firm productivity
retail
JEL: 
D2
L51
L81
R32
Document Type: 
Conference Paper

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