Retail Redlining: Are Gasoline Prices Higher in Poor and Minority Neighborhoods?

15 Pages Posted: 29 Jun 2011

See all articles by Caitlin Knowles Myers

Caitlin Knowles Myers

affiliation not provided to SSRN

Grace Close

affiliation not provided to SSRN

Laurice Fox

affiliation not provided to SSRN

John William Meyer

Independent

Madeline Niemi

affiliation not provided to SSRN

Date Written: July 2011

Abstract

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 Classification: D43, J15, L71

Suggested Citation

Myers, Caitlin Knowles and Close, Grace and Fox, Laurice and Meyer, John William and Niemi, Madeline, Retail Redlining: Are Gasoline Prices Higher in Poor and Minority Neighborhoods? (July 2011). Economic Inquiry, Vol. 49, Issue 3, pp. 795-809, 2011, Available at SSRN: https://ssrn.com/abstract=1874550 or http://dx.doi.org/10.1111/j.1465-7295.2010.00317.x

Caitlin Knowles Myers (Contact Author)

affiliation not provided to SSRN

Grace Close

affiliation not provided to SSRN

Laurice Fox

affiliation not provided to SSRN

John William Meyer

Independent

Madeline Niemi

affiliation not provided to SSRN

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