The Agglomeration of Urban Amenities: Evidence from Milan Restaurants
American Economic Review: Insights
vol. 5,
no. 2, June 2023
(pp. 141-57)
Abstract
We estimate agglomeration externalities in Milan's restaurant sector using the abolition of a unique regulation that restricted where restaurants could locate. In 2005, Milan abolished a minimum distance requirement that had kept the number of establishments artificially constant across neighborhoods. We find that after 2005, the geographical concentration of restaurants increased sharply and at an accelerating rate. Consistent with the existence of strong and self-sustaining agglomeration externalities, restaurants agglomerated in some neighborhoods and deserted others, leading to a growing divergence in local amenities across neighborhoods. Restaurants located in neighborhoods that experienced large increases in agglomeration reacted by increasing product differentiation.Citation
Leonardi, Marco, and Enrico Moretti. 2023. "The Agglomeration of Urban Amenities: Evidence from Milan Restaurants." American Economic Review: Insights, 5 (2): 141-57. DOI: 10.1257/aeri.20220011Additional Materials
JEL Classification
- D62 Externalities
- L83 Sports; Gambling; Restaurants; Recreation; Tourism
- L88 Industry Studies: Services: Government Policy
- R32 Other Spatial Production and Pricing Analysis
- R52 Regional Government Analysis: Land Use and Other Regulations