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Prices and Competition: Evidence from a Social Program

Author

Listed:
  • Emilio Aguirre

    (Ministerio de Desarrollo Social)

  • Pablo Blanchard

    (Ministerio de Desarrollo Social)

  • Fernando Borraz

    (Banco Central del Uruguay and Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

  • Joaquín Saldain

    (Banco Central del Uruguay)

Abstract

We use a micro-price dataset to analyze the impact on prices of a social program in Uruguay that allow the beneficiaries to purchase food, beverages and cleaning items exclusively in certain small retailers. We find that the beneficiaries pay significantly higher prices in relation to prices in other retailers. We find this result for the whole country with the exception of areas with the highest retailer density in the capital city, Montevideo.

Suggested Citation

  • Emilio Aguirre & Pablo Blanchard & Fernando Borraz & Joaquín Saldain, 2015. "Prices and Competition: Evidence from a Social Program," Documentos de Trabajo (working papers) 1315, Department of Economics - dECON.
  • Handle: RePEc:ude:wpaper:1315
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    File URL: http://cienciassociales.edu.uy/departamentodeeconomia/wp-content/uploads/sites/2/2016/02/1315.pdf
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    References listed on IDEAS

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    1. repec:aea:aejapp:v:11:y:2019:i:1:p:33-56 is not listed on IDEAS
    2. Gibson, John & Kim, Bonggeun, 2013. "Do the urban poor face higher food prices? Evidence from Vietnam," Food Policy, Elsevier, vol. 41(C), pages 193-203.
    3. Fernando Borraz & Leandro Zipitría & Enrique López Enciso, 2013. "Price Setting in Retailing: the Case of Uruguay," Investigación Conjunta-Joint Research,in: Laura Inés D'Amato & Enrique López Enciso & María Teresa Ramírez Giraldo (ed.), Inflationary Dynamics, Persistence, and Prices and Wages Formation, edition 1, chapter 9, pages 193-220 Centro de Estudios Monetarios Latinoamericanos, CEMLA.
    4. MacDonald, James M. & Nelson, Paul Jr., 1991. "Do the poor still pay more? Food price variations in large metropolitan areas," Journal of Urban Economics, Elsevier, vol. 30(3), pages 344-359, November.
    5. Matias Busso & Sebastian Galiani, 2019. "The Causal Effect of Competition on Prices and Quality: Evidence from a Field Experiment," American Economic Journal: Applied Economics, American Economic Association, vol. 11(1), pages 33-56, January.
    6. Kaufman, Phillip R. & MacDonald, James M. & Lutz, Steve M. & Smallwood, David M., 1997. "Do the Poor Pay More for Food? Item Selection and Price Differences Affect Low-Income Household Food Costs," Agricultural Economics Reports 34065, United States Department of Agriculture, Economic Research Service.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Keywords: market structure; market power; prices; social program;

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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