[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/cpb/discus/352.html
   My bibliography  Save this paper

The urban economics of retail

Author

Listed:
  • Ioulia Ossokina
  • Coen Teulings
  • Jan Svitak
Abstract
This paper is the first to document empirically that urban shopping areas have a pronounced centre where the rents are the highest, and a negative rent gradient. We use this insight to build and test empirically a simple theoretical model of the competition between the residential and the retail land in a city. The model predicts that rents and occupancy rates on the edges of shopping areas are most sensitive to changes in economic conditions. Demand shocks may lead to transformations between retail and residential land use, mostly at the edge, and to a contraction or expansion of shopping areas. The model predictions are tested on unique data on the location and characteristics of all retail and non-retail properties within 300 largest shopping areas in the Netherlands in 2004-2014, a period including the Great Recession. With every 100 metre distance from the centre of a shopping area rents fall, on average, by 15 percent. Shopping streets, areas located on attractive sites and areas offering free parking have a flatter distance decay. The vacancy rate on the edge of a shopping area is almost twice as high as in the centre. During the Great Recession some 2% of the retail properties were transformed into other use, mostly on the edges of the shopping areas.

Suggested Citation

  • Ioulia Ossokina & Coen Teulings & Jan Svitak, 2017. "The urban economics of retail," CPB Discussion Paper 352, CPB Netherlands Bureau for Economic Policy Analysis.
    • Handle: RePEc:cpb:discus:352
    as

    Download full text from publisher

    File URL: https://www.cpb.nl/sites/default/files/omnidownload/CPB-Discussion-Paper-352-The-urban-economics-of-retail.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ushchev, Philip & Sloev, Igor & Thisse, Jacques-François, 2015. "Do we go shopping downtown or in the ‘burbs?," Journal of Urban Economics, Elsevier, vol. 85(C), pages 1-15.
    2. Koster, Hans R.A. & Pasidis, Ilias & van Ommeren, Jos, 2019. "Shopping externalities and retail concentration: Evidence from dutch shopping streets," Journal of Urban Economics, Elsevier, vol. 114(C).
    3. Teulings, Coen N. & Ossokina, Ioulia V. & de Groot, Henri L.F., 2018. "Land use, worker heterogeneity and welfare benefits of public goods," Journal of Urban Economics, Elsevier, vol. 103(C), pages 67-82.
    4. Eric D. Gould & B. Peter Pashigian & Canice J. Prendergast, 2005. "Contracts, Externalities, and Incentives in Shopping Malls," The Review of Economics and Statistics, MIT Press, vol. 87(3), pages 411-422, August.
    5. Duranton, Gilles & Puga, Diego, 2015. "Urban Land Use," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 467-560, Elsevier.
    6. Hans R. A. Koster & Jos Ommeren & Piet Rietveld, 2014. "Agglomeration Economies and Productivity: A Structural Estimation Approach Using Commercial Rents," Economica, London School of Economics and Political Science, vol. 81(321), pages 63-85, January.
    7. Paul C. Cheshire & Christian A. L. Hilber & Ioannis Kaplanis, 2015. "Land use regulation and productivity—land matters: evidence from a UK supermarket chain," Journal of Economic Geography, Oxford University Press, vol. 15(1), pages 43-73.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Koster, Hans R.A. & Pasidis, Ilias & van Ommeren, Jos, 2019. "Shopping externalities and retail concentration: Evidence from dutch shopping streets," Journal of Urban Economics, Elsevier, vol. 114(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ioulia Ossokina & Coen Teulings & Jan Svitak, 2017. "The urban economics of retail," CPB Discussion Paper 352.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Liu, Crocker H. & Rosenthal, Stuart S. & Strange, William C., 2018. "The vertical city: Rent gradients, spatial structure, and agglomeration economies," Journal of Urban Economics, Elsevier, vol. 106(C), pages 101-122.
    3. Song Zhang & Mark Duijn & Arno J. Vlist, 2023. "Tenant Mix and Retail Rents in High Street Shopping Districts," The Journal of Real Estate Finance and Economics, Springer, vol. 67(1), pages 72-107, July.
    4. Koster, Hans R.A. & Pasidis, Ilias & van Ommeren, Jos, 2019. "Shopping externalities and retail concentration: Evidence from dutch shopping streets," Journal of Urban Economics, Elsevier, vol. 114(C).
    5. Sanchez-Vidal, Maria, 2019. "Retail shocks and city structure," LSE Research Online Documents on Economics 103394, London School of Economics and Political Science, LSE Library.
    6. Maria Sanchez Vidal, 2016. "Small shops for sale! The effects of big-box openings on grocery stores," Working Papers 2016/12, Institut d'Economia de Barcelona (IEB).
    7. Victor Couture & Jessie Handbury, 2017. "Urban Revival in America, 2000 to 2010," NBER Working Papers 24084, National Bureau of Economic Research, Inc.
    8. Sergey Kichko, 2020. "Competition, land prices and city size [Gravity redux: estimation of gravity-equation coefficients, elasticities of substitution, and general equilibrium comparative statics under asymmetric bilate," Journal of Economic Geography, Oxford University Press, vol. 20(6), pages 1313-1329.
    9. Aizawa, Hiroki & Kono, Tatsuhito, 2024. "Quantitative evaluation of benefits of place-based policies for retail agglomeration," MPRA Paper 120113, University Library of Munich, Germany.
    10. Cheshire, Paul & Hilber, Christian A. L. & Montebruno Bondi, Piero & Sanchis-Guarner, Rosa, 2022. "(In)convenient stores? What do policies pushing stores to town centres actually do?," LSE Research Online Documents on Economics 118055, London School of Economics and Political Science, LSE Library.
    11. Maria Sánchez-Vidal, 2019. "Retail shocks and city structure," CEP Discussion Papers dp1636, Centre for Economic Performance, LSE.
    12. Brandão, António & Correia-da-Silva, João & Pinho, Joana, 2014. "Spatial competition between shopping centers," Journal of Mathematical Economics, Elsevier, vol. 50(C), pages 234-250.
    13. Rosenthal, Stuart S. & Strange, William C. & Urrego, Joaquin A., 2022. "JUE insight: Are city centers losing their appeal? Commercial real estate, urban spatial structure, and COVID-19," Journal of Urban Economics, Elsevier, vol. 127(C).
    14. Hausman, Catherine & Stolper, Samuel, 2021. "Inequality, information failures, and air pollution," Journal of Environmental Economics and Management, Elsevier, vol. 110(C).
    15. Paul Cheshire & Christian Hilber & Piero Montebruno & Rosa Sanchis-Guarner, 2018. "Take Me to the Centre of Your Town! Using Micro-geographical Data to Identify Town Centres," CESifo Economic Studies, CESifo Group, vol. 64(2), pages 255-291.
    16. Gokhan Guven & Eren Inci & Antonio Russo, 2022. "Competition, Concentration and Percentage Rent in Retail Leasing," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 50(2), pages 401-430, June.
    17. Erich Battistin & Lorenzo Neri, 2017. "School Performance, Score Inflation and Economic Geography," Working Papers 837, Queen Mary University of London, School of Economics and Finance.
    18. Rutger-Jan Lange & Coen N. Teulings, 2021. "The option value of vacant land: Don't build when demand for housing is booming," Tinbergen Institute Discussion Papers 21-022/IV, Tinbergen Institute.
    19. Céline Grislain-Letrémy & Bertrand Villeneuve, 2019. "Natural disasters, land-use, and insurance," The Geneva Papers on Risk and Insurance Theory, Springer;International Association for the Study of Insurance Economics (The Geneva Association), vol. 44(1), pages 54-86, March.
    20. Dingel, Jonathan I. & Miscio, Antonio & Davis, Donald R., 2021. "Cities, lights, and skills in developing economies," Journal of Urban Economics, Elsevier, vol. 125(C).

    More about this item

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpb:discus:352. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/cpbgvnl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.