Local Retail Prices, Product Variety, and Neighborhood Change
Fernando Borraz,
Felipe Carozzi,
Nicolás González-Pampillón
et al.
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 percent and an increase in locally available product varieties. Using insights from a multiproduct model of imperfect competition and estimates fo… Show more
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