Consumption zones

Abstract

Economic geography data are typically reported using political units, such as counties, which often do not match economic units. Commuting zones (CZs) group counties into labor markets. However, CZs are not the most appropriate grouping for other economic activities. We introduce consumption zones (ConZs), groupings of counties appropriate for the analysis of consumption. We apply CZ methodology to payment card data, which report spending flows across US counties for fifteen industries. We find that different industries have different market sizes. Grocery stores have more than five times the number of ConZs as entertainment. We apply ConZs to measuring industry concentration.