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Raising the Barcode Scanner: Technology and Productivity in the Retail Sector

Barcode scanners were introduced in the 1970s as a way to reduce labor costs in stores, particularly at checkout. This paper is the first to estimate their effect on productivity. I use store-level data from the 1972, 1977, and 1982 Census of Retail Trade, matched to data on store scanner installations, to estimate scanners' effect on labor productivity. I find that early scanners increased a store's labor productivity, on average, by approximately 4.5 percent in the first few years, with a larger effect in stores carrying more packaged products likely to bear barcodes. Setup costs significantly offset the short-run productivity effect.

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File URL: https://economics.missouri.edu/working-papers/2011/wp1101_basker.pdf
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Paper provided by Department of Economics, University of Missouri in its series Working Papers with number 1101.

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Length: 40 pgs.
Date of creation: 06 Feb 2011
Date of revision: 28 May 2011
Publication status: Published in American Economic Journal: Applied Economics 2012
Handle: RePEc:umc:wpaper:1101
Contact details of provider: Postal: 118 Professional Building, Columbia, MO 65211
Phone: (573) 882-0063
Fax: (573) 882-2697
Web page: http://economics.missouri.edu/

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  1. Jonathan Beck & Michal Grajek & Christian Wey, 2011. "Estimating level effects in diffusion of a new technology: barcode scanning at the checkout counter," Applied Economics, Taylor & Francis Journals, vol. 43(14), pages 1737-1748.
  2. Emek Basker, 2012. "Raising the Barcode Scanner: Technology and Productivity in the Retail Sector," NBER Working Papers 17825, National Bureau of Economic Research, Inc.
  3. James G. Mulligan & Nilotpal Das, 2004. "Vintage Effects and the Diffusion of Time-Saving Technological Innovations: The Adoption of Optical Scanners by U.S. Supermarkets."," Working Papers 04-06, University of Delaware, Department of Economics.
  4. Paul B. Ellickson & Sanjog Misra, 2008. "Supermarket Pricing Strategies," Marketing Science, INFORMS, vol. 27(5), pages 811-828, 09-10.
  5. Bresnahan, Timothy F & Greenstein, Shane, 1999. "Technological Competition and the Structure of the Computer Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 47(1), pages 1-40, March.
  6. David A. Matsa, 2011. "Competition and Product Quality in the Supermarket Industry," The Quarterly Journal of Economics, Oxford University Press, vol. 126(3), pages 1539-1591.
  7. Bergen, Mark & Levy, Daniel & Ray, Sourav & Rubin, Paul & Zeliger, Ben, 2006. "When Little Things Mean a Lot: On the Inefficiency of Item Pricing Laws," MPRA Paper 1158, University Library of Munich, Germany.
  8. Mauro Giorgio Marrano & Jonathan Haskel & Gavin Wallis, 2009. "What Happened To The Knowledge Economy? Ict, Intangible Investment, And Britain'S Productivity Record Revisited," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(3), pages 686-716, 09.
  9. Emek Basker & Shawn Klimek & Pham Hoang Van, 2008. "Supersize It - The Growth of Retail Chains and the Rise of the "Big Box" Retail Format," Working Papers 0809, Department of Economics, University of Missouri, revised 30 Sep 2010.
  10. Leonard I. Nakamura, 1999. "The measurement of retail output and the retail revolution," Canadian Journal of Economics, Canadian Economics Association, vol. 32(2), pages 408-425, April.
  11. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The Skill Content Of Recent Technological Change: An Empirical Exploration," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1279-1333, November.
  12. Paul R. Messinger & Chakravarthi Narasimhan, 1995. "Has Power Shifted in the Grocery Channel?," Marketing Science, INFORMS, vol. 14(2), pages 189-223.
  13. Jeffrey Lin, 2011. "Technological Adaptation, Cities, and New Work," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 554-574, May.
  14. Daron Acemoglu, 2001. "Directed Technical Change," NBER Working Papers 8287, National Bureau of Economic Research, Inc.
  15. Ron S Jarmin & Javier Miranda, 2002. "The Longitudinal Business Database," Working Papers 02-17, Center for Economic Studies, U.S. Census Bureau.
  16. Das Nilotpal & Falaris Evangelos M & Mulligan James G, 2009. "Vintage Effects and the Diffusion of Time-Saving Technological Innovations," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-37, June.
  17. Lucia Foster & John Haltiwanger & C.J. Krizan, 2002. "The Link Between Aggregate and Micro Productivity Growth: Evidence from Retail Trade," NBER Working Papers 9120, National Bureau of Economic Research, Inc.
  18. Ellickson, Paul, 2005. "Does Sutton Apply to Supermarkets?," Working Papers 05-05, Duke University, Department of Economics.
  19. Thomas J. Holmes, 1999. "Bar codes lead to frequent deliveries and superstores," Staff Report 261, Federal Reserve Bank of Minneapolis.
  20. Levin, Sharon G & Levin, Stanford L & Meisel, John B, 1992. "Market Structure, Uncertainty, and Intrafirm Diffusion: The Case of Optical Scanners in Grocery Stores," The Review of Economics and Statistics, MIT Press, vol. 74(2), pages 345-50, May.
  21. Randolph E. Bucklin & Sunil Gupta, 1999. "Commercial Use of UPC Scanner Data: Industry and Academic Perspectives," Marketing Science, INFORMS, vol. 18(3), pages 247-273.
  22. Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2007. "A retrospective look at the U.S. productivity growth resurgence," Staff Reports 277, Federal Reserve Bank of New York.
  23. Daniel Levy & Mark Bergen & Shantanu Dutta & Robert Venable, 2005. "The Magnitude of Menu Costs: Direct Evidence from Large U.S. Supermarket Chains," Macroeconomics 0505012, EconWPA.
  24. Mark Doms & Ron Jarmin & Shawn Klimek, 2004. "Information technology investment and firm performance in US retail trade," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 13(7), pages 595-613.
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