2023/05/30 by Marco Leonardi, Enrico Moretti · 1 voice
Business, Management and Accounting · Economics, Econometrics and Finance · #Consumer Retail Behavior Studies #Regional Economics and Spatial Analysis #Wine Industry and Tourism
paper · doi:10.1257/aeri.20220011
openalex publication_date 2023/05/30 · openalex created_date 2025/10/10 · openalex updated_date 2026/06/11
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. (JEL D62, L83, L88, R32, R52)