{"id":5984,"date":"2024-12-19T17:56:38","date_gmt":"2024-12-19T16:56:38","guid":{"rendered":"https:\/\/www.rivistaeco.com\/?p=5984"},"modified":"2024-12-19T17:56:38","modified_gmt":"2024-12-19T16:56:38","slug":"why-are-all-the-restaurants-in-milan-by-the-navigli","status":"publish","type":"post","link":"https:\/\/www.rivistaeco.com\/en\/2024\/12\/19\/why-are-all-the-restaurants-in-milan-by-the-navigli\/","title":{"rendered":"Why Are All the Restaurants in Milan by the Navigli?"},"content":{"rendered":"

Shops selling the same type of product tend to cluster in specific areas. This phenomenon, known as agglomeration, occurs in cities worldwide. A trendy neighborhood attracts such a high number of customers that it benefits all businesses. This is what happened to restaurants in Milan following the 2005 liberalization. Proximity among direct competitors also increases the variety of offerings.<\/span><\/i><\/p>\n

In many cities, both in Italy and abroad, shops and businesses tend to cluster in specific areas. On New York’s Fifth Avenue, luxury fashion brands dominate the streetscape. New York and Los Angeles boast Diamond Districts packed with jewelry stores. Milan has its “fashion quadrilateral,” while Rome has entire streets lined with antique shops. Car dealerships and furniture stores are often located side by side. In nearly every city, the best restaurants tend to be concentrated in certain central areas.<\/span><\/p>\n

At first glance, it might seem surprising that shopkeepers and restaurateurs would open businesses near their competitors. One might expect such close proximity to lead to fiercer competition. However, economists have long offered a possible explanation for this phenomenon, known as “agglomeration.” The basic idea is that a restaurant can attract not only customers for itself but also for nearby rivals by drawing a larger crowd of consumers to the area. Moreover, patrons in these areas can more easily find a restaurant that suits their preferences amid a wealth of options.<\/span><\/p>\n

While such agglomerations can be advantageous for those at the heart of these dense zones, they can have broader implications for neighborhoods and cities. It’s not always clear whether a given agglomeration benefits everyone. It may simply reflect higher demand for restaurants or shops in certain areas, such as those near tourist attractions or universities that already draw large crowds of potential customers.<\/span><\/p>\n

What Happened in Milan After 2005?<\/b><\/h3>\n

In a recent study, we examined Milan\u2019s restaurant scene to understand if and when neighborhood-level agglomerations emerged.<\/span><\/p>\n

We based our analysis on a specific event: the abolition of the “minimum distance” law. Before 2005, Milan required a minimum distance between restaurants, meaning new establishments couldn\u2019t open too close to existing ones. This restriction applied to fast-food chains, bars, caf\u00e9s, and most other food and beverage establishments. Shorter minimum distances were permitted in densely populated neighborhoods, while longer distances applied in less populated areas. As a result, the number of restaurants in each neighborhood was generally proportional to its population. This minimum distance rule did not apply to other types of retail businesses, providing a useful point of comparison to understand subsequent changes and their causes.<\/span><\/p>\n

In 2005, a national law\u2014the “Bersani reform”\u2014abolished the minimum distance rule, allowing new businesses to open anywhere in the city, regardless of existing restaurant locations. This radically changed the distribution of restaurants across Milan: certain neighborhoods, like the Navigli, saw a surge in new establishments, while others experienced a wave of closures.<\/span><\/p>\n

In 2004, Milan\u2014unlike cities like New York, Los Angeles, or London\u2014did not have a designated “restaurant district.” By 2005, several areas with high concentrations of restaurants had emerged. Seven years after the liberalization, Milanese restaurants were significantly more spatially concentrated, though not yet to the extent seen in New York or Los Angeles.<\/span><\/p>\n

The clustering of restaurants in specific areas aligns with the agglomeration phenomenon: neighborhoods with more restaurants attract more customers, while diners seeking a restaurant are more likely to find one that suits their tastes in a concentrated area.<\/span><\/p>\n

This phenomenon did not affect other types of retail businesses, including those selling food. Unlike restaurants, these businesses were not subject to the minimum distance rule and therefore were not significantly impacted by its reform.<\/span><\/p>\n

Close Proximity but Differentiated Offerings<\/b><\/h3>\n

The increase in the number of restaurants in certain Milanese neighborhoods may not be solely attributable to agglomeration. Other characteristics, such as better transportation, superior local services, or lower crime rates, could also have played a role. While we cannot rule out these possibilities, our study found that such factors\u2014like residential and commercial property prices, transportation access, proximity to local attractions, restaurant characteristics, and the number and growth of retail businesses\u2014did not appear to directly influence the changes observed after the 2005 reform.<\/span><\/p>\n

How can so many restaurants succeed in such a small area? While agglomeration undoubtedly benefits restaurants by attracting more customers to the neighborhood, it also intensifies competition among neighboring businesses. Restaurateurs likely respond by differentiating themselves more from nearby competitors than geographically isolated restaurants do. This is precisely what happened in Milan’s most crowded areas following the 2005 reform. Our study measured differentiation through meal prices, consumer quality ratings, and cuisine types. We found that neighborhoods experiencing the greatest increase in restaurant numbers after the reform also exhibited the highest levels of differentiation in terms of price, quality, and cuisine type.<\/span><\/p>\n

When a Neighborhood Becomes Trendy<\/b><\/h3>\n

What lessons can we draw from the evolution of Milan\u2019s restaurant scene post-2005? The first takeaway is that agglomeration contributes to both the clustering of restaurants in specific urban neighborhoods and the diversity of offerings in terms of quality, price, and cuisine. The “restaurant districts” found in many cities worldwide arise, at least in part, from agglomeration rather than solely reflecting neighborhood characteristics or municipal zoning constraints.<\/span><\/p>\n

In Milan, the agglomeration following the 2005 reform appears strong enough to significantly influence the quantity and quality of consumer services available in each neighborhood. For restaurants, this clustering process unfolded gradually, accelerating over time. As neighborhoods attracted more restaurants, they became increasingly “trendy,” encouraging further business development within their boundaries. However, this also widened the gap between these neighborhoods and others.<\/span><\/p>\n

These considerations should inform municipal policies targeting urban neighborhoods, whether central or peripheral, for revitalization. More practically, they may also help residents or tourists identify areas offering the greatest variety of dining options.<\/span><\/p>\n

Marco Leonardi, a professor of political economy at the University of Milan, specializes in labor and education economics. He served as head of the department for economic planning and sustainable development in the Draghi government.<\/span><\/em><\/p>\n

Enrico Moretti, a political economy professor at the University of California, Berkeley, focuses on urban and labor economics. His book <\/span>The New Geography of Jobs<\/span> was published in Italy by Mondadori.<\/span><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Shops selling the same type of product tend to cluster in specific areas. This phenomenon, known as agglomeration, occurs in cities worldwide. 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