LAND USE REGULATION AS A BARRIER TO ENTRY: EVIDENCE FROM THE TEXAS LODGING INDUSTRY

Junichi Suzuki

International Economic Review, 2013, vol. 54, issue 2, 495-523

Abstract: This article examines the anticompetitive effects of land use regulation using microdata on midscale chain hotels in Texas. I construct a dynamic entry–exit model that endogenizes hotel chains’ reactions to land use regulation. My estimates indicate that imposing stringent regulation increases costs considerably. Hotel chains nonetheless enter highly regulated markets even if entry probabilities are lower, anticipating fewer rivals and hence greater market power. Consumers incur the costs of regulation indirectly in the form of higher prices.

Date: 2013
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https://doi.org/10.1111/iere.12004

Related works:
Working Paper: Land Use Regulation as a Barrier to Entry: Evidence from the Texas Lodging Industry (2010)
Working Paper: Land Use Regulation as a Barrier to Entry: Evidence from the Texas Lodging Industry (2010)
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