Cities and product variety: evidence from restaurants

This article measures restaurant variety in US cities and argues that city structure directly increases product variety by spatially aggregating demand. I discuss a model of entry thresholds in which market size is a function of both population and geographic space and evaluate implications of this model with a new data set of 127,000 restaurants across 726 cities. I find that geographic concentration of a population leads to a greater number of cuisines and the likelihood of having a specific cuisine is increasing in population and population density, with the rarest cuisines found only in the biggest, densest cities. Further, there is a strong hierarchical pattern to the distribution of variety across cities in which the specific cuisines available can be predicted by the total count. These findings parallel empirical work on Central Place Theory and provide evidence that demand aggregation has a significant impact on consumer product variety.