Public Transportation and Consumer Prices: Chain Stores, Street Vendors and Mom and Pop Stores

Angel Espinoza E.

No 2024-02, Working Papers from Banco de México

Abstract: Improving public transport infrastructure changes local market conditions. In this paper, I examine the impact of the construction and operation of "Metrobus", Mexico City's Bus Rapid Transit (BRT) system on consumer prices in chain stores, street vendors, and small family-owned (mom and pop) stores. I do so through a panel event study design. I consider the construction and operation of BRT as two different phenomena; while the former is associated to street closures, the latter reduces transportation costs. I show that only prices in mom and pop stores respond to changes in local market conditions produced by the introduction of BRT. For these businesses, construction pressures prices downwards; in contrast, operation is associated with partial price recoveries. I cannot reject a null effect in prices from chain stores or street vendors.

Keywords: Public Transportation; Local Markets; Price Formation (search for similar items in EconPapers)
JEL-codes: L11 L92 R12 R42 (search for similar items in EconPapers)
Date: 2024-05
New Economics Papers: this item is included in nep-com, nep-ind, nep-tre and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:bdm:wpaper:2024-02

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