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Cost of Being Poor: Retail Price and Consumer Price Search Differences across Inner-City and Suburban Neighborhoods

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  • Debabrata Talukdar
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    Abstract

    This research undertakes a carefully designed and detailed empirical study to gain insights into (1) the extent of price differentials between wealthy and poor neighborhoods; (2) what induces such differentials, especially the nature and intensity of competitive environments, including mass merchandisers like Wal-Mart; and (3) their relative impacts. It finds a price differential of about 10%-15% for everyday items. Even after controlling for store size and competition, prices are found to be 2%-5% higher in poor areas. It also finds that it is not the poverty level per se but access to cars that acts as a key determinant of consumers' price search patterns. (c) 2008 by JOURNAL OF CONSUMER RESEARCH, Inc..

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    File URL: http://www.journals.uchicago.edu/doi/pdf/10.1086/589563
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    Bibliographic Info

    Article provided by University of Chicago Press in its journal Journal of Consumer Research.

    Volume (Year): 35 (2008)
    Issue (Month): 3 (07)
    Pages: 457-471

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    Handle: RePEc:ucp:jconrs:v:35:y:2008:i:3:p:457-471

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    Web page: http://www.journals.uchicago.edu/JCR/

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    Cited by:
    1. Adrienne M. Ohler, 2011. "Who Searches for Low Prices? Population Characteristics and Price Dispersion in the Market for Prescription Drugs," Working Paper Series 20110701, Illinois State University, Department of Economics.

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