PUBLIC CHOICE AND URBAN ECONOMICS: THE UNNOTICED LINK BETWEEN LIQUOR LICENSING AND URBAN SPRAWL

The paper's hypothesis is that strict liquor licensing laws, as in Britain and the US, which ban street cafés (ostensibly to protect children) effectively transfer property rights in the streets to the commuting car users. Road pricing, either explicit or implicit via congested streets, loses its constituency. The result is road widening, neglect of city amenities and consequent urban sprawl. In line with the hypothesis, we find that continental European countries permitting street cafés and restaurants have less urban sprawl. They also attract more tourists, and their citizens are less obese. Therefore, the forthcoming Licensing Act, by (hopefully) assisting street cafés, marks an important step forward for British cities.