Local retail prices, product variety and neighborhood change

Carozzi, Felipe, Gonzalez Pampillon, Nicolas and Zipitría, Leandro (2023) Local retail prices, product variety and neighborhood change. American Economic Journal: Economic Policy. ISSN 1945-7731 (In Press)

Text (Local Retail Prices, Product Variety and Neighborhood Change) - Accepted Version Pending embargo until 1 January 2100. Download (5MB) | Request a copy

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Abstract

We study how local grocery markets within a city are affected by changes in housing markets. Our empirical strategy exploits a shift in the spatial distribution of construction activity induced by a large-scale, place-based tax exemption in the city of Montevideo. The introduction of new housing stock induced by the policy causes a reduction in grocery prices of 2.3%, and an increase in locally available product varieties. Using insights from a multiproduct model of imperfect competition and estimates for different types of stores, we show these changes are the result of incumbents’ response to an increase in local demand.

Item Type:	Article
Official URL:	https://www.aeaweb.org/journals/pol
Additional Information:	© 2023 American Economic Association
Divisions:	Geography & Environment
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HF Commerce H Social Sciences
Date Deposited:	27 Jul 2023 23:24
Last Modified:	17 Nov 2023 10:12
URI:	http://eprints.lse.ac.uk/id/eprint/119854

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