Trophy architects and design as rent-seeking: quantifying deadweight losses in a tightly regulated office market

Paul Cheshire and Gerard Dericks

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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.

JEL-codes: J01 N0 R14 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2020-10-01
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Citations: View citations in EconPapers (5)

Published in Economica, 1, October, 2020, 87(348), pp. 1078 - 1104. ISSN: 0013-0427

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Related works:
Journal Article: ‘Trophy Architects’ and Design as Rent‐seeking: Quantifying Deadweight Losses in a Tightly Regulated Office Market (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:103134

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