Empirical Analysis of Competition between Wal-Mart and Other Retail Channels

Chiou, Lesley

Abstract

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Empirical Analysis of Competition between Wal-Mart and Other Retail Channels

Lesley Chiou

Occidental College - Department of Economics

January 2008

Journal of Economics and Management Strategy, Forthcoming

Abstract:
This paper quantifies the degree of competition among Wal-Mart and different retail channels by exploiting a unique dataset that describes a consumer's choice of store. Using a discrete choice model, I estimate a consumer's choice of retailer in the sales market for DVDs among online, mass merchant, electronics, video specialty, and music stores. Wal-Mart competes more intensely with other mass merchants, and conditional on price and distance, the average consumer still prefers Wal-Mart over most other stores. I also consider a counterfactual experiment regarding the entry of Wal-Mart into 15 proposed store sites in California.

Number of Pages in PDF File: 50

Keywords: discrete choice, retail, Wal-Mart, cross-channel competition

JEL Classification: C25, L81

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Date posted: September 3, 2008

Suggested Citation

Chiou, Lesley, Empirical Analysis of Competition between Wal-Mart and Other Retail Channels (January 2008). Journal of Economics and Management Strategy, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1261243

Contact Information

Lesley Chiou (Contact Author)

Occidental College - Department of Economics ( email )

1600 Campus Road
Los Angeles, CA 90041
United States

HOME PAGE: http://www.faculty.oxy.edu/lchiou