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The Urban-Rural Gap in Local Market Access: Evidence from Grocery Demand

Author

Listed:
  • Tobias Seidel
  • Frederic Kluser
  • Maximilian von Ehrlich

Abstract

This paper leverages quasi-experimental variation from store openings and 1.5 billion grocery transactions to causally estimate the distance elasticity of grocery expenditures (−1.47) and the spatial extent of local consumption areas (approximately 16 minutes of car travel time). We embed these estimates in a nested CES demand framework to construct a granular index of local market access for nearly 350,000 grid cells (100×100m) across Switzerland. Urban areas enjoy nearly twice the consumption access of rural areas, with the 90th-to-10th percentile ratio nationally exceeding four. Compensating variation calculations show that low-income and elderly households would benefit disproportionately from improved local market access. Finally, we document that market access varies predominantly between locations, whereas income differs mostly within locations—the two dimensions are nearly orthogonal. This suggests that place-based retail policies and income-based transfers address fundamentally different dimensions of spatial inequality and should be regarded as complements.

Suggested Citation

  • Tobias Seidel & Frederic Kluser & Maximilian von Ehrlich, 2026. "The Urban-Rural Gap in Local Market Access: Evidence from Grocery Demand," CESifo Working Paper Series 12616, CESifo.
    • Handle: RePEc:ces:ceswps:_12616
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    File URL: https://www.ifo.de/DocDL/cesifo1_wp12616.pdf
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    Keywords

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    JEL classification:

    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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