E-Grocery and Housing Markets: Evidence from the Amenity Effect of Amazon Fresh as a Digital Amenity

Abstract This paper examines the impact of e-grocery entry on the housing market, focusing on Amazon Fresh, which provides grocery items and delivery services without a physical store. We find that areas receiving Amazon Fresh services experience a 2.5% increase in housing prices compared to areas within the same metropolitan region but do not receive such services. Local households show increased online consumption following Amazon Fresh’s entry, highlighting its amenity effect. Furthermore, the price effect is stronger in areas where households are more inclined to use online platforms and in socio-economically disadvantaged areas, including those with lower income, less education, higher rental occupancy, higher minority populations, lower vehicle ownership, and limited retail access. These patterns have policy implications for alleviating the " Food Desert " issue in urban areas through technological advancements in grocery markets by leveraging digital grocery services.