The Spatial Distribution of Urban Consumer Service Firms: Evidence from Yelp Reviews

Abstract

A growing literature employs distance-based measures of localization to assess the spatial distribution of firms with a focus on manufacturing across a country. We analyze the spatial concentration of a variety of consumer services firms in the Phoenix, AZ area using geo-referenced Yelp data from over 29,000 establishments. Results from a K-density approach indicate substantial localization and service differentiation among localized firms. Firm concentration varies across service cost and quality; higher quality/cost establishments tend to cluster. Our results further understanding of the modern urban landscape as cities are increasingly centers of consumption.JEL Codes: L80, R12, R32

The location of urban healthcare services: Evidence from Phoenix Yelp reviews

“…With greater direct competition among general practitioners, there is more of an incentive for general practitioners to be spatially dispersed. This finding not only aligns with the Fischer and Harrington (1996) model, but also matches the results of Humphreys and Matti (2018) who find that having more heterogeneous services is associated with greater localization among food, restaurant, and shopping establishments. Although not causally addressed, the results are consistent with the benefits of agglomeration outweighing the costs of competition among specialists, resulting in localization.…”

“…Billings and Johnson (2016) find evidence of clustering among legal services and data processing firms in urban areas and dispersion among firms in the accommodations sector. Humphreys and Matti (2018) find that localization across food, restaurant, and shopping establishments varies based upon service cost and quality. We add to this literature by being the first to use the Duranton and Overman's (2005) approach to explore healthcare services location patterns within an urban area.…”