Quantifying possible inefficiencies stemming from regulation is important to both policymakers and researchers. We use a dynamic structural model to evaluate the role of local market entry regulations in the productivity of retail trade. Our model is flexible with respect to how local market regulations influence store productivity and controls for demand in local markets. We combine the structural approach with detailed data on all stores in the Swedish retail industry. The results show that more liberal entry regulations increase future productivity and that the increase in productivity is larger for small stores and small markets than for large stores and large markets.
This study investigates whether the introduction of an entrance fee affects visitor composition at a state funded museum in Sweden. While entrance to the museum was still free, we conducted a survey to collect information about visitor characteristics and used the Contingent Valuation (CV) method to measure visitors' willingness to pay (WTP) for a visit. The results of the CV survey show that even a very low entrance fee level results in a significant reduction in several target groups that the museum has policy directives to reach. Additionally, we conducted another survey after the introduction of the fee. Thus, we have a unique opportunity to test the validity of CV in the context of a cultural good. The comparison between the predicted results from the CV and the observed change in visitor composition after the introduction of the fee implies that CV does predict a majority of the changes successfully.
Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We use a dynamic oligopoly model of entry and exit to evaluate how entry regulations affect profitability and market structure in retail. The model incorporates demand and store-level heterogeneity. Based on unique data for all retail food stores in Sweden, we find that the average entry costs for small and large stores are 10 and 18 percent lower, respectively, in markets with liberal compared with restrictive regulations. Counterfactual simulations show that lower entry costs in restrictive markets result in higher entry rates and allow us to quantify the consequences of regulations in light of trade-offs between small and large stores.
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The entry of large ("big-box") stores and the accompanying drastic decrease in the overall number of stores represent a striking trend in retail. We use a dynamic model to measure the impact of the entry of large stores on incumbents' productivity separate from demand while accounting for local markets and the endogeneity of entry. Using data on all retail food stores in Sweden, we find that incumbents' productivity increases after the entry of large stores and that the magnitude of the increase declines toward the upper part of the productivity distribution. Our findings highlight that large entrants play a crucial role in driving productivity.
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