Local Retail Prices, Product Varieties and Neighborhood Change

Felipe Carozzi, Fernando Borraz, Nicolas Gonzalez-Pampillon and Leandro Zipitria

No 16371, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study how differences in retail prices within a city are affected by changes in local housing markets. Our empirical strategy is based on an exogenous shift in the spatial distribution of construction activity induced by a large-scale, place-based tax exemption in the city of Montevideo. We provide differences-in-differences and instrumental variable estimates showing that the price of retail goods decreases in areas within the city that experience more residential development. We use a multi-product model of imperfect competition to relate this change to an expansion in either product varieties or firm entry. We report evidence in support of the varieties channel, with new development causing an increase in varieties available locally. Our results have implications for urban planning policy and the broader discussion about winners and losers from neighborhood change.

Keywords: Retail prices; Housing supply; Neighborhood change (search for similar items in EconPapers)
JEL-codes: R23 R30 (search for similar items in EconPapers)
Date: 2021-07
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP16371 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Local retail prices, product varieties and neighborhood change (2022)
Working Paper: Local retail prices, product varieties and neighborhood change (2022)
Working Paper: Local Retail Prices, Product Varieties and Neighborhood Change (2021)
Working Paper: Local Retail Prices, Product Varieties and Neighborhood Change (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:16371

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP16371

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().