The Agglomeration of Urban Amenities: Evidence from Milan Restaurants

Marco Leonardi and Enrico Moretti

American Economic Review: Insights, 2023, vol. 5, issue 2, 141-57

Abstract: We estimate agglomeration externalities in Milan's restaurant sector using the abolition of a unique regulation that restricted where restaurants could locate. In 2005, Milan abolished a minimum distance requirement that had kept the number of establishments artificially constant across neighborhoods. We find that after 2005, the geographical concentration of restaurants increased sharply and at an accelerating rate. Consistent with the existence of strong and self-sustaining agglomeration externalities, restaurants agglomerated in some neighborhoods and deserted others, leading to a growing divergence in local amenities across neighborhoods. Restaurants located in neighborhoods that experienced large increases in agglomeration reacted by increasing product differentiation.

JEL-codes: D62 L83 L88 R32 R52 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (5)

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Related works:
Working Paper: The Agglomeration of Urban Amenities: Evidence from Milan Restaurants (2022)
Working Paper: The Agglomeration of Urban Amenities: Evidence from Milan Restaurants (2022)
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DOI: 10.1257/aeri.20220011

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