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Welfare Costs of Shopping Trips

Author

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  • Hakan Yilmazkuday

    (Department of Economics, Florida International University)

Abstract

Using data on the number of visitors at the store level, this paper attempts to measure the welfare costs of traditional shopping trips for the U.S. census blocks. The investigation is based on an economic model, where individuals living in census blocks decide on which store to shop from based on the shopping-trip costs and idiosyncratic benefits. The welfare gains from removing shopping-trip costs in percentage terms are shown to depend on the weighted average of log distance measures between shopping stores and census blocks. The results show that the welfare gains from removing shopping-trip costs is about 4% for the average census block, with a range between 0.021% and 18% across census blocks that is further connected to their demographic or socioeconomic characteristics, especially their population density. Several practical policy implications follow regarding how shopping-trip costs can be reduced to achieve higher welfare gains.

Suggested Citation

  • Hakan Yilmazkuday, 2024. "Welfare Costs of Shopping Trips," Working Papers 2404, Florida International University, Department of Economics.
    • Handle: RePEc:fiu:wpaper:2404
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    More about this item

    Keywords

    Store-Level Analysis; Census Block Groups; Shopping; Welfare;
    All these keywords.

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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