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Good Eats, Durham

By Carmen Augustine DPPT_AUGUSTINE_CARMEN


1 Comment

  1. I enjoyed your presentation very much. It was interesting to see you consider the growth of restaurants in a particular part of Durham using models of urban agglomeration. Of the benefits of agglomeration that you described, I would have to think that the density of and accessibility to consumers would play a large role in a restaurant’s success. I also think that a large portion of many recent restaurateurs’ decision to locate where they have depends on the availability of rental space, which does not owe much to agglomeration at first glance. The concentration of numerous restaurants on the same block, however, does suggest that restaurateurs do see benefits in locating near one another.

    I was intrigued that you found that business continued as before or even improved at Dos Perros and Vin Rouge as adjacent restaurants opened up. I would be curious to see if this trend held true with a larger sample size, particularly as more nearby restaurants open. My prediction would be that some tipping point exists, beyond which the complementarity of adjacent restaurants (due to the “let’s go next door because the wait’s too long here” effect) diminishes and competition for customers begins. I would expect this particularly in a smaller city like Durham, where more diners travel by car than in New York, say, and where the supply of customers is much more limited.

    Lastly, it is interesting to think of agglomeration benefits of knowledge in terms of chefs’ prowess. You have anecdotal evidence of the increasing quality of chefs in Durham, but this is obviously difficult to measure empirically. In continuance with the agglomeration effects, I would be curious to know whether Hanson’s prediction that business concentration drives up wages is borne out in Durham restaurants. I know restaurateurs were reluctant to share much information with you, but it would be instructive to see whether they were noticing chefs’ wages being bid up as more restaurants open in Durham. My expectation would be that such an effect would be almost nonexistent for other, lower-skill restaurant employees as the supply of labor for these positions is so great.

    Thanks for your work!

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