IDEAS home Printed from https://ideas.repec.org/a/spr/anresc/v73y2024i1d10.1007_s00168-024-01258-1.html
   My bibliography  Save this article

Welfare costs of shopping trips

Author

Listed:
  • Hakan Yilmazkuday

    (Florida International University)

Abstract

Using data on the number of visitors at the store level, this paper attempts to measure the welfare costs of traditional shopping trips for the U.S. census blocks. The investigation is based on an economic model, where individuals living in census blocks decide on which store to shop from based on the shopping-trip costs and idiosyncratic benefits. The welfare gains from removing shopping-trip costs in percentage terms are shown to depend on the weighted average of log distance measures between shopping stores and census blocks. The results show that the welfare gains from removing shopping-trip costs is about 4% for the average census block, with a range between 0.021 and 18% across census blocks that is further connected to their demographic or socioeconomic characteristics, especially their population density. Several practical policy implications follow regarding how shopping-trip costs can be reduced to achieve higher welfare gains.

Suggested Citation

  • Hakan Yilmazkuday, 2024. "Welfare costs of shopping trips," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 73(1), pages 241-264, June.
    • Handle: RePEc:spr:anresc:v:73:y:2024:i:1:d:10.1007_s00168-024-01258-1
    DOI: 10.1007/s00168-024-01258-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00168-024-01258-1
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00168-024-01258-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stephan Heblich & Stephen J Redding & Daniel M Sturm, 2020. "The Making of the Modern Metropolis: Evidence from London," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(4), pages 2059-2133.
    2. Anas, Alex & Xu, Rong, 1999. "Congestion, Land Use, and Job Dispersion: A General Equilibrium Model," Journal of Urban Economics, Elsevier, vol. 45(3), pages 451-473, May.
    3. Gabriel M. Ahlfeldt & Stephen J. Redding & Daniel M. Sturm & Nikolaus Wolf, 2015. "The Economics of Density: Evidence From the Berlin Wall," Econometrica, Econometric Society, vol. 83, pages 2127-2189, November.
    4. Chang-Tai Hsieh & Enrico Moretti, 2019. "Housing Constraints and Spatial Misallocation," American Economic Journal: Macroeconomics, American Economic Association, vol. 11(2), pages 1-39, April.
    5. Billings, Stephen B. & Johnson, Erik B., 2016. "Agglomeration within an urban area," Journal of Urban Economics, Elsevier, vol. 91(C), pages 13-25.
    6. Jerry Hausman & Ephraim Leibtag, 2007. "Consumer benefits from increased competition in shopping outlets: Measuring the effect of Wal-Mart," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(7), pages 1157-1177.
    7. Ferdinando Monte & Stephen J. Redding & Esteban Rossi-Hansberg, 2018. "Commuting, Migration, and Local Employment Elasticities," American Economic Review, American Economic Association, vol. 108(12), pages 3855-3890, December.
    8. Guillermo Marshall & Tiago Pires, 2018. "Measuring the Impact of Travel Costs on Grocery Shopping," Economic Journal, Royal Economic Society, vol. 128(614), pages 2538-2557, September.
    9. Paul B. Ellickson & Sanjog Misra, 2008. "Supermarket Pricing Strategies," Marketing Science, INFORMS, vol. 27(5), pages 811-828, 09-10.
    10. Scott R. Baker & Stephanie Johnson & Lorenz Kueng, 2021. "Shopping for Lower Sales Tax Rates," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(3), pages 209-250, July.
    11. Florez-Acosta, Jorge & Herrera-Araujo, Daniel, 2020. "Multiproduct retailing and consumer shopping behavior: The role of shopping costs," International Journal of Industrial Organization, Elsevier, vol. 68(C).
    12. Hakan Yilmazkuday, 2011. "Agglomeration And Trade: State‐Level Evidence From U.S. Industries," Journal of Regional Science, Wiley Blackwell, vol. 51(1), pages 139-166, February.
    13. Øyvind Thomassen & Howard Smith & Stephan Seiler & Pasquale Schiraldi, 2017. "Multi-category Competition and Market Power: A Model of Supermarket Pricing," American Economic Review, American Economic Association, vol. 107(8), pages 2308-2351, August.
    14. Nathaniel Baum-Snow, 2023. "Constraints on City and Neighborhood Growth: The Central Role of Housing Supply," Journal of Economic Perspectives, American Economic Association, vol. 37(2), pages 53-74, Spring.
    15. Cecile Gaubert & Rebecca Diamond, 2022. "Spatial Sorting and Inequality," Annual Review of Economics, Annual Reviews, vol. 14(1), pages 795-819, August.
    16. Piyush Tiwari & Masayuki Doi & Tetsu Kawakami, 2006. "Analysis Of Household Leisure And Shopping Behavior In Ibaraki Prefecture, Japan," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 18(2), pages 165-178, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Redding, Stephen, 2020. "Trade and Geography," CEPR Discussion Papers 15268, C.E.P.R. Discussion Papers.
    2. Yuhei Miyauchi & Kentaro Nakajima & Stephen J. Redding, 2021. "The Economics of Spatial Mobility: Theory and Evidence Using Smartphone Data," NBER Working Papers 28497, National Bureau of Economic Research, Inc.
    3. Seidel, Tobias & Wickerath, Jan, 2020. "Rush hours and urbanization," Regional Science and Urban Economics, Elsevier, vol. 85(C).
    4. Hsu, Wen-Tai & Ma, Lin, 2021. "Urbanization policy and economic development: A quantitative analysis of China's differential hukou reforms," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    5. Larson, William & Yezer, Anthony & Zhao, Weihua, 2022. "Urban planning policies and the cost of living in large cities," Regional Science and Urban Economics, Elsevier, vol. 96(C).
    6. Rainald Borck & Peter Mulder, 2024. "Energy policies and pollution in two developing country cities: A quantitative model," CEPA Discussion Papers 78, Center for Economic Policy Analysis.
    7. Fabian Eckert & Michael Peters, 2018. "Spatial Structural Change," 2018 Meeting Papers 98, Society for Economic Dynamics.
    8. Tobias Pfutze & Carlos Rodríguez-Castelán & Daniel Valderrama, 2023. "Urban transport infrastructure and household welfare: evidence from Colombia," Empirical Economics, Springer, vol. 65(3), pages 1409-1432, September.
    9. Brülhart, Marius & Carrère, Céline & Robert-Nicoud, Frédéric, 2018. "Trade and towns: Heterogeneous adjustment to a border shock," Journal of Urban Economics, Elsevier, vol. 105(C), pages 162-175.
    10. Ahlfeldt, Gabriel M. & Heblich, Stephan & Seidel, Tobias, 2023. "Micro-geographic property price and rent indices," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    11. Dávid Krisztián Nagy, 2021. "Quantitative Economic Geography Meets History: Questions, Answers and Challenges," Working Papers 1249, Barcelona School of Economics.
    12. Stephen J. Redding, 2021. "Suburbanization in the United States 1970-2010," Working Papers 286, Princeton University, Department of Economics, Center for Economic Policy Studies..
    13. Anna-Theresa Renner & Dieter Pennerstorfer, 2020. "Modeling inter-regional patient mobility: Does distance go far enough?," Economics working papers 2020-04, Department of Economics, Johannes Kepler University Linz, Austria.
    14. Hakan Yilmazkuday, 2021. "Unequal welfare costs of staying at home across socioeconomic and demographic groups," International Journal of Urban Sciences, Taylor & Francis Journals, vol. 25(3), pages 347-365, July.
    15. Christensen, Peter & Osman, Adam, 2021. "The Demand for Mobility: Evidence from an Experiment with Uber Riders," IZA Discussion Papers 14179, Institute of Labor Economics (IZA).
    16. Michael Irlacher & Dieter Pennerstorfer & Anna‐Theresa Renner & Florian Unger, 2023. "Modeling Interregional Patient Mobility: Theory And Evidence From Spatially Explicit Data," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(4), pages 1493-1532, November.
    17. Redding, Stephen & Nakajima, Kentaro & Miyauchi, Yuhei, 2021. "Consumption access and agglomeration: evidence from smartphone data," LSE Research Online Documents on Economics 114353, London School of Economics and Political Science, LSE Library.
    18. Sturm,Daniel Marbod & Takeda,Kohei & Venables,Anthony J., 2022. "Exploring the Urban Model : Employment, Housing, and Infrastructure," Policy Research Working Paper Series 9910, The World Bank.
    19. Zarate Vasquez,Roman David, 2022. "Spatial Misallocation,Informality, and Transit Improvements : Evidence from Mexico City," Policy Research Working Paper Series 9990, The World Bank.
    20. Stephen J. Redding & David E. Weinstein, 2019. "Aggregation and the Gravity Equation," AEA Papers and Proceedings, American Economic Association, vol. 109, pages 450-455, May.

    More about this item

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:anresc:v:73:y:2024:i:1:d:10.1007_s00168-024-01258-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.