IDEAS home Printed from https://ideas.repec.org/p/ags/uconnr/149210.html
   My bibliography  Save this paper

Wal-Mart’s Monopsony Power in Local Labor Markets

Author

Listed:
  • Bonanno, Alessandro
  • Lopez, Rigoberto

Abstract

Despite considerable debate as to Wal-Mart’s impact on retail workers, to date there has been little structural analysis on the topic. This paper measures and tests for Wal-Mart’s monopsony power in local labor markets using a dominant-firm model and data on contiguous U.S. counties where the company operates. Empirical results show that Wal-Mart’s monopsony power over workers varies significantly across the country, being higher in rural counties, particularly in the south. For instance, Wal-Mart’s buying power index in labor markets in rural southern central states is estimated to be 6% or higher while the impact on northeastern states’ wages is negligible. The results suggest that this is not a nationwide problem.

Suggested Citation

  • Bonanno, Alessandro & Lopez, Rigoberto, 2008. "Wal-Mart’s Monopsony Power in Local Labor Markets," Research Reports 149210, University of Connecticut, Food Marketing Policy Center.
  • Handle: RePEc:ags:uconnr:149210
    DOI: 10.22004/ag.econ.149210
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/149210/files/rr103.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.149210?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
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Khanna, Naveen & Tice, Sheri, 2000. "Strategic Responses of Incumbents to New Entry: The Effect of Ownership Structure, Capital Structure, and Focus," The Review of Financial Studies, Society for Financial Studies, vol. 13(3), pages 749-779.
    2. Neumark, David & Zhang, Junfu & Ciccarella, Stephen, 2008. "The effects of Wal-Mart on local labor markets," Journal of Urban Economics, Elsevier, vol. 63(2), pages 405-430, March.
    3. Emek Basker, 2005. "Job Creation or Destruction? Labor Market Effects of Wal-Mart Expansion," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 174-183, February.
    4. Emek Basker & Michael Noel, 2009. "The Evolving Food Chain: Competitive Effects of Wal‐Mart's Entry into the Supermarket Industry," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(4), pages 977-1009, December.
    5. Gorter, Cees & Hassink, Wolter & Nijkamp, Peter & Pels, Eric, 1997. "On the Endogeneity of Output in Dynamic Labour-Demand Models," Empirical Economics, Springer, vol. 22(3), pages 393-408.
    6. Quandt, Richard E & Rosen, Harvey S, 1989. "Endogenous Output in an Aggregate Model of the Labor Market," The Review of Economics and Statistics, MIT Press, vol. 71(3), pages 394-400, August.
    7. 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.
    8. Paul W. Bauer & Yoonsoo Lee, 2006. "Estimating GSP and labor productivity by state," Policy Discussion Papers, Federal Reserve Bank of Cleveland, issue Mar.
    9. Dube, Arindrajit & Lester, T. William & Eidlin, Barry, 2007. "Firm Entry and Wages: Impact of Wal-Mart Growth on Earnings Throughout the Retail Sector," Institute for Research on Labor and Employment, Working Paper Series qt22s5k4pv, Institute of Industrial Relations, UC Berkeley.
    10. Baker, Jonathan B. & Bresnahan, Timothy F., 1988. "Estimating the residual demand curve facing a single firm," International Journal of Industrial Organization, Elsevier, vol. 6(3), pages 283-300.
    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. Alessandro Bonanno, 2010. "An empirical investigation of Wal-Mart's expansion into food retailing," Agribusiness, John Wiley & Sons, Ltd., vol. 26(2), pages 220-242.

    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. Bonanno, Alessandro & Lopez, Rigoberto A., 2009. "Is Wal-Mart a Monopsony? Evidence from Local Labor Markets," 2009 Conference, August 16-22, 2009, Beijing, China 51289, International Association of Agricultural Economists.
    2. Bonanno, Alessandro & Lopez, Rigoberto A., 2012. "Wal-Mart's monopsony power in metro and non-metro labor markets," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 569-579.
    3. Alessandro Bonanno & Stephan J. Goetz, 2012. "WalMart and Local Economic Development," Economic Development Quarterly, , vol. 26(4), pages 285-297, November.
    4. Charles Courtemanche & Art Carden, 2014. "Competing with Costco and Sam's Club: Warehouse Club Entry and Grocery Prices," Southern Economic Journal, John Wiley & Sons, vol. 80(3), pages 565-585, January.
    5. Courtemanche, Charles & Carden, Art, 2011. "Supersizing supercenters? The impact of Walmart Supercenters on body mass index and obesity," Journal of Urban Economics, Elsevier, vol. 69(2), pages 165-181, March.
    6. Courtemanche, Charles & Carden, Art, 2009. "The skinny on big box retailing: Wal-Mart, warehouse clubs, and obesity," MPRA Paper 25326, University Library of Munich, Germany.
    7. Richard Volpe, 2014. "Supercenters, Unionized Labor, and Performance in Food Retail," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(2), pages 325-355, April.
    8. Rebecca Cleary & Jean-Paul Chavas, 2022. "Strategic supermarket pricing of private labels and manufacturer brands," Empirical Economics, Springer, vol. 62(6), pages 2921-2950, June.
    9. Bonanno, Alessandro, 2008. "An Empirical Investigation of Wal-Mart’s Expansion into Food Retailing," Research Reports 149931, University of Connecticut, Food Marketing Policy Center.
    10. Alessandro Bonanno, 2010. "An empirical investigation of Wal-Mart's expansion into food retailing," Agribusiness, John Wiley & Sons, Ltd., vol. 26(2), pages 220-242.
    11. Borrescio-Higa, Florencia, 2015. "Can Walmart make us healthier? Prescription drug prices and health care utilization," Journal of Health Economics, Elsevier, vol. 44(C), pages 37-53.
    12. Charles Courtemanche & Art Carden & Xilin Zhou & Murugi Ndirangu, 2019. "Do Walmart Supercenters Improve Food Security?," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(2), pages 177-198, June.
    13. Fabiano Schivardi & Eliana Viviano, 2011. "Entry Barriers in Retail Trade," Economic Journal, Royal Economic Society, vol. 121(551), pages 145-170, March.
    14. Cho, Clare & Volpe, Richard, 2017. "Independent Grocery Stores in the Changing Landscape of the U.S. Food Retail Industry," Economic Research Report 265463, United States Department of Agriculture, Economic Research Service.
    15. Schuetz, Jenny, 2015. "Why are Walmart and Target Next-Door neighbors?," Regional Science and Urban Economics, Elsevier, vol. 54(C), pages 38-48.
    16. Basker, Emek, 2011. "The Causes and Consequences of Wal-Mart’s Growth," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 5, pages 110-134.
    17. Majumdar, Sumit K., 2015. "Competitor entry impact on jobs and wages in incumbent firms: retrospective evidence from a natural experiment," Business and Politics, Cambridge University Press, vol. 17(2), pages 291-326, August.
    18. 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.
    19. Rebecca Cleary & Rigoberto Lopez, 2014. "Supermarket responses to Wal-Mart Supercenter expansion: a structural approach," Empirical Economics, Springer, vol. 47(3), pages 905-925, November.
    20. Lukas Delgado-Prieto & Andrea Otero-Cortés & Andrés Calderón, 2024. "The Impact of Hard Discount Stores on Local Labor Markets: Evidence from Colombia," Documentos de trabajo sobre Economía Regional y Urbana 326, Banco de la Republica de Colombia.

    More about this item

    Keywords

    Industrial Organization;

    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:ags:uconnr:149210. 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: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/fmuctus.html .

    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.