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Trophy architects and design as rent-seeking: quantifying deadweight losses in a tightly regulated office market

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  • Cheshire, Paul
  • Dericks, Gerard

Abstract

Britain tightly restricts the supply of office space, creating substantial economic rents, but its development restrictions are politically administered and therefore gameable, inducing rent-seeking activity. We find that ‘trophy architects’ (TAs)—prior winners of a lifetime achievement award—obtain more space on a given site apparently by signalling architectural merit. Analysis of 2039 office buildings shows that TAs build 14 stories taller, thereby increasing a representative site value by 152% and capturing potential economic rents of £148m. However, we argue that this apparent premium is merely compensation for the extra costs, risks and delays of using a TA to game the planning system; it is therefore an indirect measure of the deadweight costs of this form of rent-seeking.

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  • Cheshire, Paul & Dericks, Gerard, 2020. "Trophy architects and design as rent-seeking: quantifying deadweight losses in a tightly regulated office market," LSE Research Online Documents on Economics 103134, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:103134
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    Cited by:

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    JEL classification:

    • N0 - Economic History - - General
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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