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Driving Factors of Retail Price Variation

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  • Li, Chenguang
  • Volpe, Richard III

Abstract

This study explores the strategic pricing behaviors across retail chains for produce products. We adopt a Panel-VAR model to identify the driving factors of retail price variation and find that retail price history, competition, product cost are among the key drivers of retail price change. Forecast Error Variance Decomposition (FEVD) is used to quantify the relative impact of driving factors to retail price changes and show how they affect prices differently across retail chains. We also find that higher responsiveness to competition may indicate superior management ability in price setting that associates with better profitability in practice.

Suggested Citation

  • Li, Chenguang & Volpe, Richard III, 2013. "Driving Factors of Retail Price Variation," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150486, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea13:150486
    DOI: 10.22004/ag.econ.150486
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    File URL: https://ageconsearch.umn.edu/record/150486/files/AAEA2013_Poster.pdf
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    Cited by:

    1. Asche, Frank & Larsen, Thomas A. & Smith, Martin D. & Sogn-Grundvåg, Geir & Young, James A., 2015. "Pricing of eco-labels with retailer heterogeneity," Food Policy, Elsevier, vol. 53(C), pages 82-93.

    More about this item

    Keywords

    Demand and Price Analysis; Food Consumption/Nutrition/Food Safety; Research Methods/ Statistical Methods;
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