Entry and Prices: Evidence from the Chilean Supermarket Industry
One of the most significant developments in the last couple of decades in the retail industry has been the emergence of large supermarkets (hypermarkets). The purpose of this paper is to investigate the effect on prices of the entry of a large supermarket into a given location. We use a panel with data from fifteen cities in Chile for the period 1998:I – 2004:IV. The dependent variable is the price of a bundle of 52 food products in each city relative to Santiago. We find that the entry of a hypermarket to a given city reduces prices in that local market by ten percent. Most interestingly, we also find that half of this effect takes place the year before the supermarket actually opens for business.
|Date of creation:||2005|
|Contact details of provider:|| Postal: Avda. Vicuña Mackenna 4860, Macul, Santiago|
Phone: (562) 354-4303
Fax: (562) 553-1664
Web page: http://www.economia.uc.cl
More information through EDIRC
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.:
- Basker, Emek, 2005.
"Selling a cheaper mousetrap: Wal-Mart's effect on retail prices,"
Journal of Urban Economics,
Elsevier, vol. 58(2), pages 203-229, September.
- Emek Basker, 2004. "Selling a Cheaper Mousetrap: Wal-Mart's Effect on Retail Prices," Working Papers 0401, Department of Economics, University of Missouri, revised 16 Mar 2004.
When requesting a correction, please mention this item's handle: RePEc:ioe:doctra:299. 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: (Jaime Casassus)
If references are entirely missing, you can add them using this form.