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IKEA: Product, pricing, and pass-through

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  • Baxter, Marianne
  • Landry, Anthony

Abstract

With over 300 stores in 40 countries, IKEA is a major international presence in retail housewares and furnishings. IKEA publishes country-specific catalogs with local-currency prices guaranteed to hold for 1 year. This paper explores a new dataset of IKEA products and catalog prices covering six countries for the time period 1994–2010. The dataset, with over 140,000 observations, is uniquely poised to shed light on the way in which a large multinational retailer operates in a setting characterized by a very large number of identical goods which are priced in local currency in many countries. The goal of this paper is to document the choices made by IKEA in several related decision areas. In doing so, this paper provides evidence against which existing theories can be evaluated and revised in the light of this new information.

Suggested Citation

  • Baxter, Marianne & Landry, Anthony, 2017. "IKEA: Product, pricing, and pass-through," Research in Economics, Elsevier, vol. 71(3), pages 507-520.
  • Handle: RePEc:eee:reecon:v:71:y:2017:i:3:p:507-520
    DOI: 10.1016/j.rie.2017.03.003
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Can IKEA replace the BigMac or the Ipod?
      by Economic Logician in Economic Logic on 2013-01-24 22:10:00

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    5. Dvir, Eyal & Strasser, Georg, 2018. "Does marketing widen borders? Cross-country price dispersion in the European car market," Journal of International Economics, Elsevier, vol. 112(C), pages 134-149.
    6. Jordi Jaumandreu & Shuheng Lin, 2018. "Prices under Innovation: Evidence from Manufacturing Firms," Working Papers 2019-07-04, Wang Yanan Institute for Studies in Economics (WISE), Xiamen University.
    7. Rui Mano & Ms. Carolina Osorio-Buitron & Mr. Luca A Ricci & Mr. Mauricio Vargas, 2019. "The Level REER model in the External Balance Assessment (EBA) Methodology," IMF Working Papers 2019/192, International Monetary Fund.
    8. Beatriz de Blas & Katheryn N. Russ, 2015. "Understanding Markups in the Open Economy," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(2), pages 157-180, April.
    9. Raphael Schoenle & Raphael Auer, 2012. "Market Structure and Pass-Through," 2012 Meeting Papers 61, Society for Economic Dynamics.
    10. Roberto Rigobon & Brent Neiman & Alberto Cavallo, 2013. "Product Introductions, Currency Unions, and the Real Exchange Rate," 2013 Meeting Papers 1357, Society for Economic Dynamics.
    11. Alberto Cavallo & Brent Neiman & Roberto Rigobon, 2014. "Currency Unions, Product Introductions, and the Real Exchange Rate," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(2), pages 529-595.
    12. Mr. Luis M. Cubeddu & Signe Krogstrup & Gustavo Adler & Mr. Pau Rabanal & Mai Dao & Mrs. Swarnali A Hannan & Luciana Juvenal & Ms. Carolina Osorio-Buitron & Cyril Rebillard & Mr. Daniel Garcia-Macia &, 2019. "The External Balance Assessment Methodology: 2018 Update," IMF Working Papers 2019/065, International Monetary Fund.
    13. Mark A. Wynne, 2012. "Five Years of Research on Globalization and Monetary Policy: What Have We Learned?," Annual Report, Globalization and Monetary Policy Institute, Federal Reserve Bank of Dallas, pages 2-17.
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