The Determinants of Consumer Price Dispersion: Evidence from French Supermarkets

26 Pages Posted: 26 Jun 2017  

Nicoletta Berardi

Banque de France - Economic Study and Research Division

Patrick Sevestre

Aix-Marseille University

Jonathan Thebault

Independent

Date Written: June 2017

Abstract

We characterize the dispersion of grocery prices in France based on a large original data set of prices in more than 1500 supermarkets. On average across products, the 90th percentile of relative prices is 17 percentage points higher than the 10th and the mean absolute deviation from quarterly average product prices is 5%. We show that temporal price variations (including sales and promotions) explain only little of the observed price dispersion, while the spatial permanent component of price dispersion largely dominates. Price dispersion across stores in France essentially results from persistent heterogeneity in retail chains' pricing, while local conditions regarding demand or competition contribute to a much lower extent.

Keywords: price disper sion, retail chain, wholesaler

JEL Classification: E31, D40

Suggested Citation

Berardi, Nicoletta and Sevestre, Patrick and Thebault, Jonathan, The Determinants of Consumer Price Dispersion: Evidence from French Supermarkets (June 2017). Banque de France Working Paper No. 632. Available at SSRN: https://ssrn.com/abstract=2992468

Nicoletta Berardi (Contact Author)

Banque de France - Economic Study and Research Division ( email )

31, rue Croix des Petits Champs
75049 Paris Cedex 01
FRANCE

Patrick Sevestre

Aix-Marseille University ( email )

3 Avenue Robert Schuman
3 Avenue Robert Schuman,
Aix-en-Provence, 13628
France

Jonathan Thebault

Independent ( email )

No Address Available

Paper statistics

Downloads
11
Abstract Views
96