MARKET STRUCTURE AND ENTRY: WHERE'S THE BEEF? - CEPR

the same way as the actions of the other strategic player. We have not gone beyond 1995
in part for reasons of data availability and in part because the CJD (“mad cow”) beef
scare is likely to have affected all players’ plans and consumption in 1996. Also, Wimpy
might by then be argued to be (potentially at least) a strategic player in the local drive-
through market.
3.3. Data
Briefly, the basic data on store locations and openings comes, in McDonalds’
case, entirely from the company itself. These data are very high quality and very useful
for other reasons. For example they establish that exit is a very unusual phenomenon;
less than 1% of all the stores ever opened in the UK have closed. In the case of Burger
King, the data come from more of a variety of sources, although we do have a complete
listing of stores in 1995. Again, exit is unusual, though more common than for McD.
The basic data on the demographic and other characteristics of local authority
districts come from Regional Trends, the only consistent source of annual data at this
level of aggregation. These two data sources (on outlets and on demographics) are
matched using a Midas “Postzon” package based on UK postcodes. A third source (the
“AA”’s “A to B”) gives distances between districts. More detail on construction of each
of the variables, including definitions, sources and problems, is given in the Data
Appendix, available on request.
The estimation sample consists of five annual observations each for 452 districts
- we exclude Northern Ireland, all small islands apart from the Isle of Wight, and three
London boroughs (see footnote 5). For each such district market, we observe the
geographical area and population, the proportion of under-16s and pensioners, the council
tax rate, average wage rate, and unemployment rate. We also observe the market
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