Street pedestrianization in urban districts: Economic impacts in Spanish cities

Abstract This study analyzes the influence of pedestrianization of urban space on the revenues of surrounding retail stores. Pedestrianization refers to the conversion of street use from vehicles to a walkable environment. We compiled a unique transaction dataset containing the estimates of sales volumes for stores across Spain and combine it with data from Open Street Map to provide the history of land-use changes at the street-level. Based on these high-granular datasets, we apply a difference-in-differences empirical method to measure the economic impact of pedestrian intervention. The results show that stores located in pedestrian environments tend to record higher sales volumes than stores located in non-pedestrian environments. We further analyze the mechanisms underlying this revenue-boosting effect and find that a key factor is the store density of the pedestrianized place, while geographic location is insignificant. This finding suggests that there are no differentiation impacts on stores' revenue based on whether pedestrianization occurs in the city center or periphery. Store category also acts as an important moderator for revenue impacts, with positive effects observed mostly for the cafe or restaurant category. Our results provide suggestive evidence that people prefer a pedestrian-friendly environment to a vehicle-oriented one for non-tradable, local consumption activities. This research provides evidence-based policy implications for urban planners interested in making smart, sustainable cities.