Data and Code for: Local Retail Prices, Product Variety and Neighborhood Change

We study how local grocery markets within a city are affected by changes in housing markets. Our empirical strategy exploits a shift in the spatial distribution of construction activity induced by a large-scale, place-based tax exemption in the city of Montevideo. The introduction of new housing stock induced by the policy causes a reduction in grocery prices of 2.3%, and an increase in locally available product varieties. Using insights from a multi-product model of imperfect competition and estimates for different types of stores, we show these changes are the result of incumbents' response to an increase in local demand.