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RETAIL REDLINING: ARE GASOLINE PRICES HIGHER IN POOR AND MINORITY NEIGHBORHOODS?
Author(s) -
MYERS CAITLIN KNOWLES,
CLOSE GRACE,
FOX LAURICE,
MEYER JOHN WILLIAM,
NIEMI MADELINE
Publication year - 2011
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.2010.00317.x
Subject(s) - competition (biology) , differential (mechanical device) , economics , gasoline , point (geometry) , percentage point , racial composition , demographic economics , microeconomics , econometrics , race (biology) , mathematics , ecology , physics , geometry , botany , finance , engineering , biology , aerospace engineering , thermodynamics
This study uses new data on retail gasoline prices in three cities to provide evidence on the relationship between neighborhood characteristics and consumer prices. We find that prices do not vary greatly with neighborhood racial composition, but that prices are higher in poor neighborhoods. For a 10% point increase in poor families relative to middle‐upper income families, retail gasoline prices increase by an average of 0.70%. Two‐thirds of this differential is explained by cost, competition, and demand characteristics of poor neighborhoods. The remaining differential likely reflects price discrimination in response to lower competition and/or more inelastic demand in poor neighborhoods. ( JEL D43, J15, L71)