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Raising the Barcode Scanner: Technology and Productivity in the Retail Sector

In: Standards, Patents and Innovations

  • Emek Basker

Barcodes and barcode scanners transformed the grocery industry in the 1970s. I use store-level data from the 1972, 1977, and 1982 Census of Retail Trade, matched to data on store scanner installations, to estimate scanners' effect on labor productivity. I find that scanners increased a store's labor productivity, on average, by approximately 4.5 percent in the first few years. The effect was larger in stores carrying more packaged products, consistent with the presence of network externalities. Short-run gains were small relative to fixed costs, suggesting that the impediment to widespread adoption of the new technology was profitability, not coordination problems. (JEL J24, L24, L81, O33)

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This chapter was published in:
  • Timothy Simcoe & Ajay K. Agrawal & Stuart Graham, 2014. "Standards, Patents and Innovations," NBER Books, National Bureau of Economic Research, Inc, number simc12-1.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 13206.
    Handle: RePEc:nbr:nberch:13206
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    23. Jonathan Beck & Michal Grajek & Christian Wey, 2007. "Estimating level effects in diffusion of a new technology: Barcode scanning at the checkout counter," ESMT Research Working Papers ESMT-07-002, ESMT European School of Management and Technology.
    24. Daniel Levy & Mark Bergen & Shantanu Dutta & Robert Venable, 1997. "The Magnitude of Menu Costs: Direct Evidence from Large U. S. Supermarket Chains," The Quarterly Journal of Economics, Oxford University Press, vol. 112(3), pages 791-824.
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