DO FAST-FOOD CHAINS PRICE DISCRIMINATE ON THE RACE AND INCOME CHARACTERISTICS OF AN AREA

This article reports tests for differences in prices charged by fast-f ood restaurants that serve markets with customers of widely divergent incomes and ethnic backgrounds. The data contain detailed prices on it ems sold at over 400 Burger King, Wendy's, KFC, and Roy Rogers restaur ants in New Jersey and Pennsylvania locations. I find significant diff erences in price based on the race and income characteristics of a zip -code region. When income and cost differences are taken into account, meal prices rise approximately 5% for a 50% rise in the black populat ion.