New Evidence on Outlet Substitution Effects in Consumer Price Index Data
In this paper we provide new and detailed evidence on the impact on the U.S. CPI of the appearance and growth of new types of product outlets. Using actual CPI microdata for 2002-2007, we find that the changing mix of outlets had a statistically significantly negative impact on average prices in most of the 14 item food categories we study. In contrast to previous studies of this issue, our approach allows us to examine the effects of changes in outlet mix both across outlet types (such as among large groceries, discount department stores, and warehouse club stores) and within those outlet categories. We also adjust for numerous differences in item characteristics such as brand name, organic certification, and, importantly, package size. In our sample we find that the upward impact on price from increased item quality has offset most of the downward impact of lower-priced outlets. We also provide evidence showing that a simulated “matched-model” approach similar to that used in the CPI yields indexes that differ to a surprising extent from our baseline hedonic indexes, which also hold outlet and item mix constant.
|Date of creation:||Nov 2008|
|Contact details of provider:|| Postal: 2 Massachusetts Avenue, N.E. Room 2860, Washington, D. C. 20212|
Phone: (202) 606-5900
Fax: (202) 606-7890
Web page: https://www.bls.gov
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Matthew D. Shapiro & David W. Wilcox, 1996.
"Mismeasurement in the Consumer Price Index: An Evaluation,"
NBER Chapters,in: NBER Macroeconomics Annual 1996, Volume 11, pages 93-154
National Bureau of Economic Research, Inc.
- Matthew D. Shapiro & David W. Wilcox, 1996. "Mismeasurement in the Consumer Price Index: An Evaluation," NBER Working Papers 5590, National Bureau of Economic Research, Inc.
- Alan G. White, 2000. "Outlet types and the Canadian Consumer Price Index," Canadian Journal of Economics, Canadian Economics Association, vol. 33(2), pages 488-505, May.
- David E. Lebow & Jeremy B. Rudd, 2003. "Measurement Error in the Consumer Price Index: Where Do We Stand?," Journal of Economic Literature, American Economic Association, vol. 41(1), pages 159-201, March.
- 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.
- Jerry Hausman & Ephraim Leibtag, 2005. "Consumer Benefits from Increased Competition in Shopping Outlets: Measuring the Effect of Wal-Mart," NBER Working Papers 11809, National Bureau of Economic Research, Inc.
- Jerry Hausman & Ephraim Leibtag, 2006. "Consumer Benefits from Increased Competition in Shopping Outlets: Measuring the Effect of Wal-Mart," CeMMAP working papers CWP06/06, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- Jerry Hausman & Ephraim Leibtag, 2009. "CPI Bias from Supercenters: Does the BLS Know that Wal-Mart Exists?," NBER Chapters,in: Price Index Concepts and Measurement, pages 203-231 National Bureau of Economic Research, Inc.
- Jerry Hausman & Ephraim Leibtag, 2004. "CPI Bias from Supercenters: Does the BLS Know that Wal-Mart Exists?," NBER Working Papers 10712, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:bls:wpaper:ec080070. 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: (Gregory Kurtzon)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.