Economics at your fingertips  

Transportation Improvement and Hollowing-out of Urban Commercial Center: Do They Harm Consumer Welfare?

Akio Kishi and Tatsuhito Kono ()

MPRA Paper from University Library of Munich, Germany

Abstract: Concentration or dispersion of retail stores is the result of market interactions. If it involves market failures, then the spatial location equilibrium of retail stores is not optimal in terms of social welfare. We investigate two important market failures involving retail store location: “monopolistic competition among retail stores” and “shopping externality caused by multipurpose shopping”. Retail store locations in market equilibrium and those in a social optimum are derived. Next, we show that the degree of hollowing-out of urban centers is not always excessive from the perspective of the social optimum. It is believed that hollowing-out of urban commercial centers harms social welfare. But on the contrary, if the accessibility of suburban areas from residential areas is lower than that of the urban center, we confirm that hollowing-out of urban commercial centers is desirable. In this case, promotion of retail stores’ location in urban center, such as subsidies to locate in the city center or restrictions on location in suburbs, decreases social welfare. Instead, promotion of stores’ location in the suburbs is preferred.

Keywords: monopolistic competition; hollowing-out; suburbanization; shopping externality (search for similar items in EconPapers)
JEL-codes: L11 L13 R12 R32 (search for similar items in EconPapers)
Date: 2020-03-24
New Economics Papers: this item is included in nep-com, nep-geo, nep-opm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) original version (application/pdf)

Related works:
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:

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

Page updated 2021-10-04
Handle: RePEc:pra:mprapa:99247