Working Paper

Geospatial Heterogeneity in Inflation: A Market Concentration Story

Abstract: We study how inflation varies across regions with different income levels and the role of retailer market structure. Using NielsenIQ Retail Scanner and Business Dynamics Statistics data, we document new stylized facts of spatial heterogeneity in food inflation and retailer market structure. From 2006 to 2020, poorer metropolitan statistical areas experienced annualized food inflation that was 0.46 percentage points higher than that of richer ones—amounting to a cumulative difference of 8.8 percentage points over the period. Poorer areas also had fewer goods, fewer retailers, and higher market concentration. Using a triple-difference estimator during the 2014–15 bird flu outbreak, we identify a causal link between market concentration and inflation.

JEL Classification: E31; I31; L11; L81; R12;

https://doi.org/10.29338/wp2025-15

Status: Published in 2025

Bibliographic Information

Provider: Federal Reserve Bank of Atlanta

Part of Series: FRB Atlanta Working Paper

Publication Date: 2025-11-06

Number: 2025-15