Research Seminar

Spatial frictions in consumption and retail competition – Maximilian von Ehrlich

12 Dec 2023

24105 Kiel
Kiel Institut für Weltwirtschaft, Kiellinie 66


Maximilian von Ehrlich (University of Bern, CESifo, and CRED)


This paper analyzes spatial consumption frictions and the degree of local retail competition, estimating the causal effect of store openings on individual shopping behavior. We compute a measure of local grocery market access. In a framework with non-homothetic preferences low-income households have higher expenditure shares and To this end, we combine unique household-store-linked transaction data from the laLrgest Swiss retailer with administrative data. We find that a same-chain store opening in the proximity of households’ residences reduces their expenditures at incumbent stores by 30% in the first month. At the same time, more minor effects for competitors suggest imperfect substitutability between retail chains. We estimate from the effect’s decay with distance causal gravity functions, allowing us to quantify spatial consumption areas. Significant heterogeneities across regions and socio-demographic groups indicate substantial inequalities in consumption access.


Frédéric Kluser (University of Bern) – Tobias Seidel (University of Duisburg-Essen, CESifo, and CRED) – Maimilian von Ehrlich (University of Bern, CESifo, and CRED)


Lecture Hall (A-032)