Tuesday, June 23, 2009

Why are there no tire stores in Hyde Park?

Last Sunday, we got our first flat tire in Chicago. We used Fix-a-flat on the tire and aired up. Then, we looked around our neighborhood for a tire store to repair our tire, but there was not a single tire store in sight. Keep in mind that Hyde Park, our Chicago neighborhood, is home to 44,000 people. In disbelief, we came home and conducted a Google search for nearby tire stores. Here's a Google map of Hyde Park and Kenwood where I did a search for tire store.


You might get excited about marker B because it is in Hyde Park, but if you look closely, that's the University of Chicago bookstore, a tiresome place. They have no tires there. The other two listings, 350 E. 43rd St. and 6250 E. Evans Ave., are not in Hyde Park, but in locations I avoid on account of crime reports or just not knowing what's there.

There's more to this puzzle. Hyde Park seems to be one of the few neighborhoods without a tire store. Here's the same Google map, but zoomed out to show the tire stores throughout the entire city of Chicago:


The red dots indicate tire stores. Here's what I get from the map:

Neighborhoods with tire stores
Lakeview, Lincoln Park, Wrigleyville, Albany Park, Roscoe Village, Bucktown, Hermosa, Little Italy, Back of the Yards, Archer Heights, Garfield Ridge, Chicago Lawn, Gatewood, South Shore, downtown Chicago and most suburbs.

Neighborhoods without tire stores
Hyde Park, Kenwood, Oakland, Humboldt Park and West Town. There may be others; it's harder to use a map to identify what neighborhoods do not have tire stores. Also, if these markers represent other tiresome bookstores, there might be more neighborhoods without tire stores.

Quibble with the map all you will. It's still clear that there are no tire stores in Hyde Park and at least four options if you live in the Wrigleyville-Lakeview-Lincoln Park area. And, call my perspective biased, but it also looks like tire stores are fairly uniformly distributed throughout the city, except for Kenwood and Hyde Park.

All of this begs the question: Why are there no tire stores in Hyde Park? I see three related reasons to expect a dearth of tire stores in any particular neighborhood: lack of demand, sorting/locational choice, and high cost of doing business (i.e., low supply).

Lack of demand. People demand tire repair as part of the cost of driving. If you drive enough to warrant buying a car, you will eventually get a flat tire. Flat tires need repairing and tire stores are made for this job. As more people own and drive cars, we should expect to see more tire repair options. This is common sense.

In this story, low demand for driving means low demand for tire repair. If you live in a city, there's a good chance your demand for driving is less than if you live in Montana. That's because there are plenty of other transportation options (busses, trains, cabs, etc.) and the cost of driving is higher (rude drivers, high price of parking, more potholes, etc).

Returning to the number of tire stores, we should already expect fewer tire stores per capita in Hyde Park than Montana, but that's not a puzzle. It is a puzzle that Hyde Park residents not have a tire store, but Wrigleyvilleians have four options nearby. If Hyde Park had better public transportation options than Wrigleyville, that might explain it. But, the Red Line goes straight from Wrigleyville to downtown, whereas Hyde Park's best train option is the Metra, which comes less frequently and costs more.

Neighborhood Sorting. Another potential explanation for seeing few tire stores in a neighborhood was put forth in a classic and widely-cited paper by Charles Tiebout in 1956 (A Pure Theory of Local Expenditures). The Tiebout idea is that municipalities compete with one another by each offering a menu of public services, amenities and a cost structure for living in that particular place. People rationally choose among the menus, sorting into their preferred places.

Tiebout applied his concept to local governments with taxing authority: the idea is that if you're someone who likes public services, you might not mind paying the higher taxes to provide them. By making the choice to move to the high tax/high service area, you're essentially voting for consuming those services and paying those taxes. In this view of the world, local governments cannot get away with offering awful public services with high taxes because people will just move away, and the local government won't have any tax base. In the real world, governments are still constrained by this effect, but less so because moving is costly.

Back to the tire store problem... Applying the Tiebout theory to Chicago neighborhoods, a potential reason there are no tire stores in Hyde Park is that each of the Chicago neighborhoods offers a menu of services for potential residents, and most people who do not mind being far from a tire store picked Hyde Park, whereas the tire-loving fiends of Wrigleyville also picked their preferred neighborhood (for your econ-fiends, this is a separating equilibrium in a screening game. What might a pooling equilibrium look like?)

That's possible, but there are two key problems with this explanation. First, I doubt people sort on the proximity of tire stores. Although flat tires happen to everyone who drives, getting a flat tire is a rare event. People are more likely to sort on proximity of parks. Second, the Tiebout story only makes sense if the neighborhood or some neighborhood authority is deciding on whether to allow tire stores. With local ordinances, this might be true, but I suspect the market determines whether tire stores come or go.

High cost/ low supply. As I don't believe the demand-side story or the sorting story, I had to look to another explanation. What if it is really expensive to provide tire services in Hyde Park relative to other neighborhoods? In this case, we would surely see fewer tire stores because higher cost means lower profit, all else the same.

There are several reasons to believe there is a higher cost of repairing tires in Hyde Park:

1. Labor cost. The local laborers, many of whom are University of Chicago students, are good at math but really unskilled in tire maintenance. To stock a store with labor, you would have to port people from surrounding neighborhoods whose comparative advantage is tire repair. That makes the labor cost a little higher.
2. Rent. Compared to the surrounding neighborhoods, it costs quite a lot to have a place to change tires in Hyde Park. Compared to Wrigleyville, however, rent is probably lower in Hyde Park.
3. Raw materials. If raw materials for a tire store must come by an 18-wheeler, it is a real pain to get those materials to anywhere on 55th street. That's because someone messed with the Chicago grid and put a huge kink in it right near Lake Park and 55th street. I would imagine that trucks have trouble navigating that curve. Therefore, we don't see many businesses, let alone tire stores along 55th street.

But, there are other streets in Hyde Park that would be fine locations for a tire store: 55th isn't the only street. For example, why isn't there a nearby tire store on 47th or 53rd? Both of those streets have businesses, and a tire store would fit in beautifully.

Needless to say, our tire is still flat and I'm still searching for a good explanation for why there are no nearby tire stores. It looks like I'll be putting the spare tire on the car and driving to Back of the Yards. Wish me luck!

2 comments:

  1. It doesn't matter if there are better transit options on the north side. There are more cars because there is a greater proportion of the population who is affluent enough to own one and drive one on a regular basis. (Not to mention fix one.) Also, labor costs are less on the south side. Hyde Park is actually NOT all U of C kids with a college degree or better... plenty of people in HP/Kenwood/Oaklawn/Woodlawn who would jump at an auto store/auto maintenance job.

    Also, your search terms affected your results here: O'Reilly Murray auto parts store on 47th/Cottage would probably sell tires. A quick search says they'll at least order them per your specifications, which means you take public transit for a few days at worst. There's also an Autozone at 64th and King Drive, which is not quite in HP/Kenwood but Woodlawn is a hop on the bus away. And there's another Autozone on 76th and Stony Island if you're really THAT sketched out by Woodlawn.

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  2. Interesting points.

    I'm not sure the income differences explain everything. There are still lots of cars in Hyde Park. That suggests to me that there are enough cars to warrant some tire service station right in Hyde Park.

    I agree that there are plenty of people around here who you'd expect to see jump at an auto maintenance job. I suggested that option because I am still confused about why there isn't a tire store here.

    Do you (or does anyone) know if Autozone or O'Reilly has someone -- i.e., the "tire professional" mentioned on the fix-a-flat can -- to repair a flat tire (not just order a new one)? The tire is fine -- it just needs to be patched.

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