Consumption zones.

This article introduces "Consumption Zones" (ConZs), a novel geographic clustering of U.S. counties based on actual consumer spending patterns, designed to better capture local consumption markets than traditional political units or commuting zones (CZs), which are labor-market based. Using anonymized county-level payment card transaction data from Fiserv across fifteen retail and service industries, the authors apply a hierarchical clustering methodology to define ConZs that reflect the geographic extent of consumption, revealing substantial variation in market sizes by industry—for example, grocery stores have many more, smaller ConZs compared to entertainment industries. The study demonstrates that ConZs yield lower and often more accurate measures of market concentration (Herfindahl–Hirschman Indexes) than counties or states, with implications for antitrust analysis illustrated through a hypothetical merger of major grocery chains Albertsons and Kroger. The authors argue that ConZs provide a more economically meaningful framework for analyzing local consumption, regional economic measurement, and policy, while noting limitations such as data aggregation at the county level and exclusion of e-commerce.