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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

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..

Suggested Citation

  • Debabrata Talukdar, 2008. "Cost of Being Poor: Retail Price and Consumer Price Search Differences across Inner-City and Suburban Neighborhoods," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 35(3), pages 457-471, July.
    • Handle: RePEc:oup:jconrs:v:35:y:2008:i:3:p:457-471
    DOI: 10.1086/589563
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