How small are small markets? Location choice and catchment area in the day care market
Sprache des Vortragstitels:
In this article we analyze entry decisions of day care facilities relative to local market characteristics to evaluate the widespread suspicion that local markets are geographically very small. We have access to a panel of all child care facilities for the metropolitan region of Vi-enna, Austria, over nearly a decade, as well as to geographically extremely disaggregated data on the spatial distribution of children at the 250m x 250m grid cell level. We find that the number of children is the single most important determinant of market entry, but the effect diminishes quickly as the distance between the children's places of residence and the day care facility increases. We conclude that the providers' catchment areas in metropolitan regions are indeed very narrow (about 500m).