“…The literature finds evidence for trade-off between scale economy and heterogeneity of preference, particularly with respect to income and race (e.g., Alesina, Baqir, and Hoxby, 2004;Alesina and Spolaore, 2003;Austin, 1999;Brasington, 1999Brasington, , 2003aBrasington, , 2003bGordon and Knight, 2009;Nelson, 1990;Sorensen, 2006). 4 These empirical studies employed a discrete choice model to investigate the role of economics of scale, heterogeneous preference, and tax base gains in merger decisions.…”