Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Thursday, June 12, 2008

Supermarkets and Planning Regulation

Posted by D. Danie Sokol

Rachel Griffith, University College London, Institute for Fiscal Studies (IFS) discusses Supermarkets and Planning Regulation in her latest paper.

ABSTRACT: 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.

http://lawprofessors.typepad.com/antitrustprof_blog/2008/06/supermarkets-an.html

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