Evidence from a UK supermarket chain

Paul Cheshire, Christian Hilber and Ioannis Kaplanis ()

No 2012/15, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: We use unique store-specific data for a major UK supermarket chain to estimate the impact of planning, which restricts both the size and location of stores, on store output. Using the quasi-natural experiment of the variation in planning policies between England and other UK countries and a difference-in-difference approach, we isolate the impact of Town Centre First (TCF) policies. We find that space contributes directly to the productivity of stores and planning policies in England directly reduce output both by reducing store sizes and forcing stores onto less productive sites. Our results suggest that since the late 1980s planning policies have imposed a loss of total output of at least 18.3 to 24.9%. This is equivalent to more than a ‘lost decade’ of output growth in a major sector generated directly by government policy.

Keywords: Land use regulation; regulatory costs; firm productivity; retail (search for similar items in EconPapers)
JEL-codes: D2 L51 L81 R32 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2012
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Citations: View citations in EconPapers (6)

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