IDEAS home Printed from https://ideas.repec.org/p/ags/aaea18/274205.html
   My bibliography  Save this paper

Market Concentration, Market Shares, and Retail Food Prices: Evidence from the U.S. Women, Infants, and Children Program

Author

Listed:
  • Ma, Meilin
  • Saitone, Tina L.
  • Volpe, Richard J.
  • Sexton, Richard J.
  • Saksena, Michelle

Abstract

We explore pricing in local food-retailing markets where supermarkets operate versus those occupied solely by smaller food retailers. Using data from the Women, Infants, and Children program in the Greater Los Angeles area, we show that supermarkets do not raise prices in local markets or as a function of market concentration or firm market shares. Smaller food retailers charge substantially higher prices on average than supermarkets. Their prices increase with market concentration and shares of sales, especially when small retailers face no direct competition from supermarkets. Given the dominance of small retailers in some low-income areas, our findings have important implications regarding local market power, food costs, and supermarket entry.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Ma, Meilin & Saitone, Tina L. & Volpe, Richard J. & Sexton, Richard J. & Saksena, Michelle, 2018. "Market Concentration, Market Shares, and Retail Food Prices: Evidence from the U.S. Women, Infants, and Children Program," 2018 Annual Meeting, August 5-7, Washington, D.C. 274205, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea18:274205
    DOI: 10.22004/ag.econ.274205
    as

    Download full text from publisher

    File URL: http://ageconsearch.umn.edu/record/274205/files/Abstracts_18_05_22_22_33_20_20__169_237_57_250_0.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. repec:aea:aecrev:v:107:y:2017:i:8:p:2308-51 is not listed on IDEAS
    2. Ver Ploeg, Michele & Nulph, David & Williams, Ryan Blake, 2011. "Mapping Food Deserts in the U.S," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, pages 1-4.
    3. Céline Bonnet & Pierre Dubois, 2010. "Inference on vertical contracts between manufacturers and retailers allowing for nonlinear pricing and resale price maintenance," RAND Journal of Economics, RAND Corporation, vol. 41(1), pages 139-164, March.
    4. Richard J. Volpe & Nathalie Lavoie, 2008. "The Effect of Wal-Mart Supercenters on Grocery Prices in New England," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(1), pages 4-26.
    5. Basker, Emek, 2011. "The Causes and Consequences of Wal-Mart’s Growth," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 5, pages 110-134.
    6. Steven Salop & Joseph Stiglitz, 1977. "Bargains and Ripoffs: A Model of Monopolistically Competitive Price Dispersion," Review of Economic Studies, Oxford University Press, vol. 44(3), pages 493-510.
    7. Jerry Hausman & Ephraim Leibtag, 2007. "Consumer benefits from increased competition in shopping outlets: Measuring the effect of Wal-Mart," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(7), pages 1157-1177.
    8. repec:wly:econjl:v:128:y:2018:i:614:p:2380-2413 is not listed on IDEAS
    9. Nevo, Aviv, 2001. "Measuring Market Power in the Ready-to-Eat Cereal Industry," Econometrica, Econometric Society, vol. 69(2), pages 307-342, March.
    10. Dutko, Paula & Ver Ploeg, Michele & Farrigan, Tracey, 2012. "Characteristics and Influential Factors of Food Deserts," Economic Research Report 262229, United States Department of Agriculture, Economic Research Service.
    11. David E. Davis, 2012. "Bidding for WIC Infant Formula Contracts: Do Non-WIC Customers Subsidize WIC Customers?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(1), pages 80-96.
    12. Dutko, Paula & Ver Ploeg, Michele & Farrigan, Tracey L., 2012. "Retail Wastelands: Characteristics and Influential Factors of Food Deserts," 2012 AAEA/EAAE Food Environment Symposium 123201, Agricultural and Applied Economics Association.
    13. Timothy J. Richards & Stephen F. Hamilton, 2006. "Rivalry in Price and Variety among Supermarket Retailers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(3), pages 710-726.
    14. Lamm, R McFall, 1981. "Prices and Concentration in the Food Retailing Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 30(1), pages 67-78, September.
    15. 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.
    16. Øyvind Thomassen & Howard Smith & Stephan Seiler & Pasquale Schiraldi, 2017. "Multi-category Competition and Market Power: A Model of Supermarket Pricing," American Economic Review, American Economic Association, vol. 107(8), pages 2308-2351, August.
    17. Cowling, Keith & Waterson, Michael, 1976. "Price-Cost Margins and Market Structure," Economica, London School of Economics and Political Science, vol. 43(171), pages 267-274, August.
    18. repec:oup:qjecon:v:134:y:2019:i:4:p:2011-2084. is not listed on IDEAS
    19. Thomas Reardon & C. Peter Timmer & Christopher B. Barrett & Julio Berdegué, 2003. "The Rise of Supermarkets in Africa, Asia, and Latin America," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1140-1146.
    20. Cotterill, Ronald W, 1986. "Market Power in the Retail Food Industry: Evidence from Vermont," The Review of Economics and Statistics, MIT Press, vol. 68(3), pages 379-386, August.
    21. Howard Smith & John Thanassoulis, 2015. "Prices, profits, and pass-through of costs along a supermarket supply chain: bargaining and competition," Oxford Review of Economic Policy, Oxford University Press, vol. 31(1), pages 64-89.
    22. Germain Gaudin, 2018. "Vertical Bargaining and Retail Competition: What Drives Countervailing Power?," Economic Journal, Royal Economic Society, vol. 128(614), pages 2380-2413, September.
    23. repec:ags:jlaare:264064 is not listed on IDEAS
    24. Charles Courtemanche & Art Carden, 2014. "Competing with Costco and Sam's Club: Warehouse Club Entry and Grocery Prices," Southern Economic Journal, Southern Economic Association, vol. 80(3), pages 565-585, January.
    25. Stefano DellaVigna & Matthew Gentzkow, 2019. "Uniform Pricing in U.S. Retail Chains," The Quarterly Journal of Economics, Oxford University Press, vol. 134(4), pages 2011-2084.
    26. repec:oup:revage:v:30:y:2008:i:1:p:4-26. is not listed on IDEAS
    27. Richards, Timothy J. & Pofahl, Geoffrey M., 2010. "Pricing Power by Supermarket Retailers: A Ghost in the Machine?," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 25(2), pages 1-11.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Industrial Org./Supply Chain Management; Food and Agricultural Policy Analysis; Demand and Price Analysis;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea18:274205. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: http://edirc.repec.org/data/aaeaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.