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Spatial density, average prices and price dispersion. Evidence from the Spanish hotel industry

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  • Jacint Balaguer Coll

    ()
    (Universitat Jaume I)

  • José C. Pernías

    ()
    (Dpto. de Economía)

Abstract

Based on the assumption that location is especially relevant in the lodging industry, we exploit a dataset of Spanish hotels to examine the relationship between spatial competition and retail price level and dispersion. Our results support the hypothesis that a greater density of competitors implies both a lower level and less dispersion of retail prices. We find that close competitors, in terms of hotel category and distance, have a stronger effect on price setting behavior. Moreover, we report weak evidence that the relationship between spatial competition and price level depends on whether the day considered belongs to the midweek or the weekend. Therefore, variation in the type of consumers seems to play quite an important role in explaining the relationship. Partiendo del supuesto de que la localización es especialmente relevante para el sector del alojamiento, utilizamos una base de datos de hoteles españoles para examinar la relación entre competencia espacial y el nivel y la dispersión de los precios de las habitaciones. Nuestros resultados confirman la hipótesis de que una mayor densidad de competidores implica niveles de precios menores y menor dispersión de precios. Los competidores cercanos, ya lo sean en términos de categoría hotelera como de distancia, tienen una mayor influencia sobre la fijación de precios. Adicionalmente, encontramos evidencia débil acerca de que la relación entre competencia espacial y el nivel de precios depende de si el día considerado es laborable o corresponde al fin de semana. Por tanto, las variaciones en el tipo de consumidores parecen tener un papel importante en la explicación de esta relación.

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File URL: http://www.ivie.es/downloads/docs/wpasec/wpasec-2010-03.pdf
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Bibliographic Info

Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie EC with number 2010-03.

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Length: 28 pages
Date of creation: Apr 2010
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasec:2010-03

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Keywords: Nivel de precios; dispersión de precios; competencia espacial; sector hotelero. Price level; price dispersion; spatial competition; hotel industry;

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References

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Citations

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Cited by:
  1. Ana María Sabater & Araceli Mora & Beatriz García Osma, 2010. "Strategic accounting choice around firm level labour negotiations," Working Papers. Serie EC 2010-09, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  2. Francisco Mas Ruiz & Juan Luis Nicolau Gonzálbez, 2010. "Contribution of individual to collective brands," Working Papers. Serie EC 2010-07, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  3. Asier Minondo & Francisco Requena Silvente, 2010. "Welfare gains from imported varieties in Spain, 1988-2006," Working Papers. Serie EC 2010-12, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  4. Ángel Pardo Tornero & María Dolores Furió Ortega, 2010. "Politics and elections at the Spanish stock exchange," Working Papers. Serie EC 2010-11, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  5. Ginés Hernández Cánovas & María Camino Ramón Llorens, 2010. "Venture capitalists in Spain: cluster analysis of criteria used in the screening process," Working Papers. Serie EC 2010-08, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  6. Elena Pardo & Inés Küster Boluda & Torpong Suemanotham, 2010. "Product placement in video games as a marketing strategy: an attempt to analysis in Disney company," Working Papers. Serie EC 2010-04, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  7. Nikolaos Georgantzis & Aitor Ciarreta & Carlos Gutiérrez-Hita, 2010. "Renewable sources, technology mix, and competiton in liberalized electricity markets: the case of Spain," Working Papers. Serie EC 2010-06, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  8. M. Teresa Sanchis Llopis & Vicente Esteve Garcia & Antonio Cubel, 2010. "International technology diffusion through patents during the second half of the XXth century," Working Papers. Serie EC 2010-10, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

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