Demand Externalities from Co-Location

Preprint OPEN
Boudhayan Sen; Jiwoong Shin; K. Sudhir;
  • Subject: Revenue economies of scope, Demand externalities, One stop shopping, Co-location, Selection, Retail industry

We illustrate an approach to measure demand externalities from co-location by estimating household level changes in grocery spending at a supermarket among households that also buy gas at a co-located gas station, relative to those who do not. Controlling for observable... View more
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    Figure 2: Moderating Effect of Household Loyalty on Grocery Spending (a) Predicted Change in Grocery Spend for Gas Users, by Share of Wallet: Predicted results plotted based on estimates in Column 2 of Table 6.

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