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Shop Around and You Pay More

Author

Listed:
  • Ji Yan
  • Kun Tian
  • Huw D. Dixon
  • Saeed Heravi
  • Peter Morgan

Abstract

We examine the relationship between the prices paid by households and their shopping patterns measured in terms of shopping frequency and the range of stores visited. We use the TNS data which allows us to control for household heterogeneity. The main contribution of the paper is that we find proper instruments to correct for endogeneity of shopping patterns. And we find that there exists a robust positive relationship between the price paid and the number of store visited. We argue that visiting larger number of stores makes households less likely to save using store-loyalty discounts.

Suggested Citation

  • Ji Yan & Kun Tian & Huw D. Dixon & Saeed Heravi & Peter Morgan, 2014. "Shop Around and You Pay More," CESifo Working Paper Series 4940, CESifo.
    • Handle: RePEc:ces:ceswps:_4940
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    References listed on IDEAS

    as
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    8. Rachel Griffith & Martin O'Connell, 2010. "Public Policy towards Food Consumption," Fiscal Studies, Institute for Fiscal Studies, vol. 31(4), pages 481-507, December.
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    13. Park, C Whan & Iyer, Easwar S & Smith, Daniel C, 1989. "The Effects of Situational Factors on In-Store Grocery Shopping Behavior: The Role of Store Environment and Time Available for Shopping," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 15(4), pages 422-433, March.
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    More about this item

    Keywords

    shopping frequency; price; store loyalty; demographics;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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