Urban Redevelopment Program and Demand Externality

Daiji Kawaguchi (), Keisuke Kawata () and Chigusa Okamoto ()
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Daiji Kawaguchi: University of Tokyo
Keisuke Kawata: University of Tokyo
Chigusa Okamoto: University of Tokyo

No 16925, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Demand externality generated by the agglomeration of commercial activities is a potential source of city formation. We study the impact of a large-scale urban redevelopment program involving the construction of a shopping complex at the center of Tokyo. The redevelopment program increased the land price and commercial building use in its neighborhood. It also increased the total sales of neighborhood firms but not their profits. We argue that the redevelopment program generated substantial demand externality but the benefit fell on the landlord.

Keywords: demand externality; shopping externality; urban redevelopment program (search for similar items in EconPapers)
JEL-codes: R12 R14 R52 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2024-04
New Economics Papers: this item is included in nep-ure
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