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Implications of Big Box Retail Location on Regional Profits, Consumer Utility, and Land Rents

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Author Info

  • Stater, Mark

    (Trinity College, Harford, CT)

  • Visser, Michael S.

    (Sonoma State U)

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    Abstract

    This paper uses a monocentric city model to examine the effects of big box retailing on local retail prices, land values and utility. Relative to small local retailers, the big box offers a price discount that increases in its marginal cost advantage. Big box entry reduces local retail prices and profits, but provides an increase in household utility that depends positively on the distance between the big box location and the CBD. However, big box locations are unstable with imperfectly competitive land markets, as developers and local governments have incentives to entice big boxes to switch locations.

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    File URL: http://journal.srsa.org/ojs/index.php/RRS/article/view/166/121
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    Bibliographic Info

    Article provided by Southern Regional Science Association in its journal Review of Regional Studies.

    Volume (Year): 38 (2008)
    Issue (Month): 1 ()
    Pages: 8-28

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    Handle: RePEc:rre:publsh:v:38:y:2008:i:1:p:8-28

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    Web page: http://www.srsa.org

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    Keywords: Regional;

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