<p>We are interested in evaluating the impact of restrictive planning regulation on entry into the UK grocery retail industry. We estimate a model similar to Bresnahan and Reiss (1991) where we allow for multiple store formats. We find that more restrictive planning regulation reduces the number of large format supermarkets in equilibrium. However, the impact is overstated if variation in demographic characteristics across markets is not also controlled for. Our estimates suggest that restrictive planning regulation leads to a loss to consumers of up to £10m per annum. This cost must be offset against any benefits that arise, e.g. due to reduced congestion.</p>
Authors
CPP Co-Director, IFS Research Director
Rachel is Research Director and Professor at the University of Manchester. She was made a Dame for services to economic policy and education in 2021.
Heike Harmgart
Report details
- Publisher
- CEPR
Suggested citation
Griffith, R and Harmgart, H. (2008). Supermarkets and planning regulation. London: CEPR. Available at: https://ifs.org.uk/publications/supermarkets-and-planning-regulation (accessed: 20 May 2024).
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