IDEAS home Printed from https://ideas.repec.org/a/taf/irapec/v36y2022i1p85-101.html
   My bibliography  Save this article

Prices and competition: evidence from a social program

Author

Listed:
  • Emilio Aguirre
  • Pablo Blanchard
  • Fernando Borraz
  • Joaquín Saldain

Abstract

We use a micro price dataset for products defined at the universal product code level to analyze the impact on prices of a social program in Uruguay that allows its beneficiaries to purchase food, beverages, and cleaning items exclusively in certain small retailers. We find that an unintended negative consequence is that the beneficiaries pay significantly higher prices to other retailers. We find this result for the whole country except for areas with the highest retailer density in Montevideo’s capital city. We also do not find evidence of price discrimination of stores against program beneficiaries. The participant stores charge the same price to beneficiaries and other customers. For an overall assessment of the program, we find that an unintended consequence of it was a price increase for all customers in capital cities that increased the cost of the program.

Suggested Citation

  • Emilio Aguirre & Pablo Blanchard & Fernando Borraz & Joaquín Saldain, 2022. "Prices and competition: evidence from a social program," International Review of Applied Economics, Taylor & Francis Journals, vol. 36(1), pages 85-101, January.
    • Handle: RePEc:taf:irapec:v:36:y:2022:i:1:p:85-101
    DOI: 10.1080/02692171.2021.1905785
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/02692171.2021.1905785
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/02692171.2021.1905785?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. Matias Busso & Sebastian Galiani, 2019. "The Causal Effect of Competition on Prices and Quality: Evidence from a Field Experiment," American Economic Journal: Applied Economics, American Economic Association, vol. 11(1), pages 33-56, January.
    2. Gibson, John & Kim, Bonggeun, 2013. "Do the urban poor face higher food prices? Evidence from Vietnam," Food Policy, Elsevier, vol. 41(C), pages 193-203.
    3. Fernando Borraz & Leandro Zipitría, 2012. "Retail Price Setting in Uruguay," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 77-109, January.
    4. MacDonald, James M. & Nelson, Paul Jr., 1991. "Do the poor still pay more? Food price variations in large metropolitan areas," Journal of Urban Economics, Elsevier, vol. 30(3), pages 344-359, November.
    5. Kaufman, Phillip R. & MacDonald, James M. & Lutz, Steve M. & Smallwood, David M., 1997. "Do the Poor Pay More for Food? Item Selection and Price Differences Affect Low-Income Household Food Costs," Agricultural Economic Reports 34065, United States Department of Agriculture, Economic Research Service.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ivone Perazzo & Analía Rivero & Andrea Vigorito, 2021. "¿Qué sabemos sobre los programas de transferencias no contributivas en Uruguay? Una síntesis de resultados de investigación disponibles sobre el PANES, AFAM-PE y TUS," Documentos de Trabajo (working papers) 21-33, Instituto de Economía - IECON.

    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. John Gibson & Bonggeun Kim, 2018. "Economies of scale, bulk discounts, and liquidity constraints: comparing unit value and transaction level evidence in a poor country," Review of Economics of the Household, Springer, vol. 16(1), pages 21-39, March.
    2. Gibson, John & Kim, Bonggeun, 2013. "Do the urban poor face higher food prices? Evidence from Vietnam," Food Policy, Elsevier, vol. 41(C), pages 193-203.
    3. Richard Volpe & Edward C Jaenicke & Lauren Chenarides, 2018. "Store Formats, Market Structure, and Consumers’ Food Shopping Decisions," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 40(4), pages 672-694, December.
    4. Stewart, Hayden & Blisard, Noel, 2006. "Household versus Community Effects: Who Really Pays More for Food?," 2006 Annual meeting, July 23-26, Long Beach, CA 21053, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Leschewski, Andrea Marie & Weatherspoon, Dave D., 2014. "Fast Food Restaurant Pricing Strategies in Michigan Food Deserts," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 17(A), pages 1-24, March.
    6. Larry L. Howard & Nishith Prakash, 2012. "Do School Lunch Subsidies Change The Dietary Patterns Of Children From Low-Income Households?," Contemporary Economic Policy, Western Economic Association International, vol. 30(3), pages 362-381, July.
    7. Juan Jiménez & Jordi Perdiguero, 2011. "Does Accessibility Affect Retail Prices and Competition? An Empirical Application," Networks and Spatial Economics, Springer, vol. 11(4), pages 677-699, December.
    8. Arturo E. Osorio & Maria G. Corradini & Jerome D. Williams, 2013. "Remediating food deserts, food swamps, and food brownfields: helping the poor access nutritious, safe, and affordable food," AMS Review, Springer;Academy of Marketing Science, vol. 3(4), pages 217-231, December.
    9. Bondemark, Anders, 2020. "The relationship between accessibility and price – The case of Swedish food stores," Journal of Transport Geography, Elsevier, vol. 82(C).
    10. Juan Pablo Atal & José Ignacio Cuesta & Felipe González & Cristóbal Otero, 2024. "The Economics of the Public Option: Evidence from Local Pharmaceutical Markets," American Economic Review, American Economic Association, vol. 114(3), pages 615-644, March.
    11. Gibson, John & Kim, Bonggeun, 2013. "Quality, Quantity, and Nutritional Impacts of Rice Price Changes in Vietnam," World Development, Elsevier, vol. 43(C), pages 329-340.
    12. Silva,Joana C. G. & Morgandi,Matteo & Levin,Victoria, 2016. "Trust in government and support for redistribution," Policy Research Working Paper Series 7675, The World Bank.
    13. Andrew Rhodes & Jidong Zhou, 2019. "Consumer Search and Retail Market Structure," Management Science, INFORMS, vol. 67(6), pages 2607-2623, June.
    14. Rhodes, Andrew, 2011. "Multiproduct pricing and the Diamond Paradox," MPRA Paper 32511, University Library of Munich, Germany.
    15. Paul Carrillo & Dave Donaldson & Dina Pomeranz & Monica Singhal, 2023. "Misallocation in Firm Production: A Nonparametric Analysis Using Procurement Lotteries," CESifo Working Paper Series 10485, CESifo.
    16. Daniel Czarnievicz & Leandro Zipitría, 2018. "Concentración y precios en cinco mercados minoristas," Documentos de Trabajo (working papers) 0618, Department of Economics - dECON.
    17. Argentesi, Elena & Buccirossi, Paolo & Cervone, Roberto & Duso, Tomaso & Marrazzo, Alessia, 2021. "The effect of mergers on variety in grocery retailing," International Journal of Industrial Organization, Elsevier, vol. 79(C).
    18. Stewart, Hayden & Dong, Diansheng, 2011. "Variation in retail costs for fresh vegetables and salty snacks across communities in the United States," Food Policy, Elsevier, vol. 36(2), pages 128-135, April.
    19. William Maloney & Pablo Garriga & Marcela Meléndez & Raúl Morales & Charl Jooste & James Sampi & Jorge Thompson Araujo & Ekaterina Vostroknutova, "undated". "Latin America and the Caribbean Economic Review, April 2024 - Competition: The Missing Ingredient for Growth? [Informe Económico América Latina y el Caribe, Abril 2024: Competencia: ¿el ingrediente," World Bank Publications - Reports 41230, The World Bank Group.
    20. Stewart, Hayden & Davis, David E., 2005. "Price Dispersion and Accessibility: A Case study of Fast Food," MPRA Paper 7617, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

    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:taf:irapec:v:36:y:2022:i:1:p:85-101. 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CIRA20 .

    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.