Can Competition Keep the Restrooms Clean? Price, Quality and Spatial Competition

Pennerstorfer, Dieter (2017) Can Competition Keep the Restrooms Clean? Price, Quality and Spatial Competition. Regional Science and Urban Economics, 64. pp. 117-136. ISSN 0166-0462

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Abstract

This article investigates the influence of competition on price and product quality among Austrian camping sites, a market characterized by both horizontal (spatial) and vertical product differentiation. Theoretically, the effect of competition on quality is ambiguous and depends on the degree of cost substitutability between output and quality. Estimating a system of equations shows that intense competition has a positive impact on product quality and a negative effect on prices (conditional on quality). As high quality is associated with high prices, the total effect of competition on prices is rather small.

Item Type: Article
Additional Information: The work was generously supported by funds of the Austrian National Bank (OeNB) Anniversary Fund (project number: 14665). To see the final version of this paper please visit the publisher's website. Access to the published version requires a subscription. The original publication is available at www.elsevier.com.
Keywords: Spatial competition, product quality, retail prices, retail markets, camping sites
Classification Codes: JEL D22, L13, L82, R32
Divisions: Departments > Volkswirtschaft > Volkswirtschaftspolitik u Industrieökon.
Version of the Document: Accepted for Publication
Depositing User: Gertraud Novotny
Date Deposited: 07 Jun 2017 15:18
Last Modified: 28 Feb 2019 08:38
Related URLs:
FIDES Link: https://bach.wu.ac.at/d/research/results/80751/
URI: https://epub.wu.ac.at/id/eprint/5580

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