Discrimination in Retail

Residential areas with majority-minority populations often have limited access to grocery store chains with competitive prices and quality offerings in the United States. We use a regression model to estimate the effects of each neighborhood’s racial and educational makeup on prices paid by customers. We find 3% higher prices in predominantly black neighborhoods for identical grocery items. The price differences are largely explained by how stores are designated high-price or low-price to reflect the state of retail competition in each neighborhood