Shop Around and You Pay More

29 Pages Posted: 17 Sep 2014

See all articles by Ji Yan

Ji Yan

Durham University

Kun Tian

Cardiff University - Cardiff Business School

Huw David Dixon

Cardiff University - Cardiff Business School

Saeed Heravi

Cardiff University

Peter Huw Morgan

Cardiff University - Cardiff Business School

Date Written: August 21, 2014

Abstract

We examine the relationship between the prices paid by households and their shopping patterns measured in terms of shopping frequency and the range of stores visited. We use the TNS data which allows us to control for household heterogeneity. The main contribution of the paper is that we find proper instruments to correct for endogeneity of shopping patterns. And we find that there exists a robust positive relationship between the price paid and the number of store visited. We argue that visiting larger number of stores makes households less likely to save using store-loyalty discounts.

Keywords: shopping frequency, price, store loyalty, demographics

JEL Classification: D03, D12, D83, M31

Suggested Citation

Yan, Ji and Tian, Kun and Dixon, Huw David and Heravi, Saeed and Morgan, Peter Huw, Shop Around and You Pay More (August 21, 2014). CESifo Working Paper Series No. 4940, Available at SSRN: https://ssrn.com/abstract=2496882 or http://dx.doi.org/10.2139/ssrn.2496882

Ji Yan

Durham University ( email )

Old Elvet
Mill Hill Lane
Durham, Durham DH1 3HP
United Kingdom

Kun Tian

Cardiff University - Cardiff Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

Huw David Dixon (Contact Author)

Cardiff University - Cardiff Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

Saeed Heravi

Cardiff University ( email )

Aberconway Building
Colum Drive
CF10 3EU Cardiff, Wales CF10 3EU
United Kingdom

Peter Huw Morgan

Cardiff University - Cardiff Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

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