The Retail Price of Inequality

Posted: 11 Nov 2002

See all articles by David M. Frankel

David M. Frankel

Iowa State University - Department of Economics

Eric D. Gould

Hebrew University of Jerusalem - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Abstract

This paper studies the relation between a city's income distribution and its retail price level using panel data. We find that an increase in the presence of lower-middle income households, relative to poor or upper income households, is associated with lower prices. Our findings suggest that greater income inequality raises the prices that poor households face, thus making it harder for them to invest in human capital.

Suggested Citation

Frankel, David M. and Gould, Eric D., The Retail Price of Inequality. Journal of Urban Economics, Vol. 49, No. 2, pp. 219-239, March 2001. Available at SSRN: https://ssrn.com/abstract=319522

David M. Frankel

Iowa State University - Department of Economics ( email )

260 Heady Hall
Ames, IA 50011
United States

Eric D. Gould (Contact Author)

Hebrew University of Jerusalem - Department of Economics ( email )

Mount Scopus
Jerusalem, 91905
Israel
+972 2 588 3247 (Phone)
+972 2 581 6071 (Fax)

HOME PAGE: https://sites.google.com/site/edgould

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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