We analyse the effects of competition on quality provision in spatial markets where providers compete on both price and quality and where travel distance is a key factor for consumers choice of provider. Examples of such markets include health care, long-term care, child care and education....

We study the effects of horizontal mergers when firms compete on quality and price. Two key factors are identified: (i) the magnitude of variable quality costs, and (ii) the relative magnitudes of cross-quality and cross-price effects on demand. The merging firms will increase (reduce) both...