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The Determinants of Consumer Price Dispersion: Evidence from French Supermarkets

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  • N. Berardi
  • P. Sevestre
  • J. Thébault

Abstract

We characterize the dispersion of grocery prices in France based on a large original data set of prices in more than 1500 supermarkets. On average across products, the 90th percentile of relative prices is 17 percentage points higher than the 10th and the mean absolute deviation from quarterly average product prices is 5%. We show that temporal price variations (including sales and promotions) explain only little of the observed price dispersion, while the spatial permanent component of price dispersion largely dominates. Price dispersion across stores in France essentially results from persistent heterogeneity in retail chains' pricing, while local conditions regarding demand or competition contribute to a much lower extent.

Suggested Citation

  • N. Berardi & P. Sevestre & J. Thébault, 2017. "The Determinants of Consumer Price Dispersion: Evidence from French Supermarkets," Working papers 632, Banque de France.
  • Handle: RePEc:bfr:banfra:632
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    Cited by:

    1. Sofronis Clerides & Pascal Courty & Yupei Ma, 2020. "Store expensiveness and consumer saving: Insights from a new decomposition of price dispersion," Working Paper series 20-08, Rimini Centre for Economic Analysis.
    2. Espen R. Moen & Fredrik Wulfsberg & Øyvind Aas, 2020. "Price Dispersion and the Role of Stores," Scandinavian Journal of Economics, Wiley Blackwell, vol. 122(3), pages 1181-1206, July.
    3. Philip ME Garboden, 2019. "Sources and Types of Big Data for Macroeconomic Forecasting," Working Papers 2019-3, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
    4. Berardi Nicoletta, 2018. "Is price dispersion a concern for French consumers?," Rue de la Banque, Banque de France, issue 54, january.
    5. Antonio M. Salcedo & Gregorio Izquierdo Llanes, 2020. "Refining the Monetary Poverty Indicators Under a Join Income-Consumption Statistical Approach: An Application to Spain Based on Empirical Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 147(2), pages 501-516, January.
    6. Nicoletta Berardi & Federico Ravenna & Mario Samano, 2020. "Everyday Regular Prices," Working papers 746, Banque de France.

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    More about this item

    Keywords

    price dispersion; retail chain; wholesaler.;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General

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