Quotation Pennerstorfer, Dieter, Schindler, Nora, Weiss, Christoph, Yontcheva, Biliana. 2020. Income Inequality and Product Variety: Empirical Evidence.




This article investigates the relationship between income inequality and firms’ locations andproduct choices. Using detailed information on income at a regionally disaggregated level andindividual data on Austrian restaurants, we demonstrate that firm conduct crucially depends on the distribution (in addition to the level) of income. Local markets with higher income inequality are characterized by a larger number of firms, offering a broader range of products and product variants that are on average less common. These findings indicate that local demand is substantially influenced by the heterogeneity in consumers’ income endowments, resulting in large differences in product variety.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Working/discussion paper, preprint
Language English
Title Income Inequality and Product Variety: Empirical Evidence
Year 2020
URL http://www.economics.jku.at/papers/2020/wp2017.pdf
JEL L22, D31, R12, L83


Pennerstorfer, Dieter (Former researcher)
Schindler, Nora (Details)
Weiss, Christoph (Details)
Yontcheva, Biliana (Details)
Department of Economics (Weiss) (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
2906 Power industry (Details)
5370 Industrial economics (Details)
5372 Regulatory economics (Details)
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