Seula Kim and Michael A. Navarrete
Working Paper 2025-15
November 2025
Full text 
Abstract:
We study how inflation varies across regions with different income levels and the role of retailer market structure. Using NielsenIQ Retail Scanner and Business Dynamics Statistics data, we document new stylized facts of spatial heterogeneity in food inflation and retailer market structure. From 2006 to 2020, poorer metropolitan statistical areas experienced annualized food inflation that was 0.46 percentage points higher than that of richer ones—amounting to a cumulative difference of 8.8 percentage points over the period. Poorer areas also had fewer goods, fewer retailers, and higher market concentration. Using a triple-difference estimator during the 2014–15 bird flu outbreak, we identify a causal link between market concentration and inflation.
JEL classification: E31, I31, L11, L81, R12
Key words: inflation, retailer market structure, market concentration, spatial inequality
https://doi.org/10.29338/wp2025-15
Seula Kim (seulakim@psu.edu) is with Penn State and IZA. Michael A. Navarrete (mnavarrete.econ@gmail.com) is with the Research Department of the Federal Reserve Bank of Atlanta. The authors thank Miguel Ampudia, Boragan Aruoba, Ben Bernanke, Marcus Casey, Thesia Garner, John Haltiwanger, Judith Hellerstein, Colin Hottman, David Johnson, Ethan Kaplan, Munseob Lee, Giacomo Ponzetto, John Shea, Lumi Stevens, Nico Trachter, and participants at seminars at the BLS, the University of Maryland, the Federal Reserve Board, the Federal Reserve Bank of Atlanta, and various conferences including the NBER Competition in the US Agricultural Sector Meeting, BSE Summer Forum, UChicago-SNU Inequality conference, BdE-BOC-ECB-Fed Conference, NASMES Meeting, DC Urban Economics Workshop, Midwest Macro Meeting, and SED for helpful comments. They also thank the RESET team for providing the infrastructure to address their research project. This research is funded by the Washington Center for Equitable Growth. Researcher(s)’ own analyses calculated (or derived) based in part on data from Nielsen Consumer LLC and marketing databases provided through the NielsenIQ Datasets at the Kilts Center for Marketing Data Center at the University of Chicago Booth School of Business. The conclusions drawn from the NielsenIQ data are those of the researcher(s) and do not reflect the views of NielsenIQ. NielsenIQ is not responsible for, had no role in, and was not involved in analyzing and preparing the results reported herein. Any opinions and conclusions expressed herein are those of the authors and do not necessarily represent the views of the Federal Reserve System, the Board of Governors, or its staff. Michael Navarrete worked on this paper while a PhD student at the University of Maryland, College Park. All errors are the authors’.
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