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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, July.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 13206.
    Handle: RePEc:nbr:nberch:13206
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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    7. Thomas J. Holmes, 1999. "Bar codes lead to frequent deliveries and superstores," Staff Report 261, Federal Reserve Bank of Minneapolis.
    8. Emek Basker & Shawn Klimek & Pham Hoang Van, 2008. "Supersize It: The Growth of Retail Chains and the Rise of the "Big Box" Retail Format," Working Papers 0809, Department of Economics, University of Missouri, revised 30 Sep 2010.
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    18. Paul R. Messinger & Chakravarthi Narasimhan, 1995. "Has Power Shifted in the Grocery Channel?," Marketing Science, INFORMS, vol. 14(2), pages 189-223.
    19. David A. Matsa, 2011. "Competition and Product Quality in the Supermarket Industry," The Quarterly Journal of Economics, Oxford University Press, vol. 126(3), pages 1539-1591.
    20. Levin, Sharon G & Levin, Stanford L & Meisel, John B, 1992. "Market Structure, Uncertainty, and Intrafirm Diffusion: The Case of Optical Scanners in Grocery Stores," The Review of Economics and Statistics, MIT Press, vol. 74(2), pages 345-50, May.
    21. Leonard I. Nakamura, 1999. "The measurement of retail output and the retail revolution," Canadian Journal of Economics, Canadian Economics Association, vol. 32(2), pages 408-425, April.
    22. Das Nilotpal & Falaris Evangelos M & Mulligan James G, 2009. "Vintage Effects and the Diffusion of Time-Saving Technological Innovations," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-37, June.
    23. Mark Doms & Ron Jarmin & Shawn Klimek, 2004. "Information technology investment and firm performance in US retail trade," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 13(7), pages 595-613.
    24. Ron S Jarmin & Javier Miranda, 2002. "The Longitudinal Business Database," Working Papers 02-17, Center for Economic Studies, U.S. Census Bureau.
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