Price Dispersion and the Role of Stores

32 Pages Posted: 14 Aug 2017 Last revised: 15 Aug 2017

See all articles by Espen R. Moen

Espen R. Moen

BI Norwegian Business School; Centre for Economic Policy Research (CEPR)

Fredrik Wulfsberg

Oslo Business School

Øyvind Aas

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES)

Date Written: August 9, 2017

Abstract

This paper studies price dispersion in the Norwegian retail market for 766 products across 4 297 stores over 60 months. Price dispersion for homogeneous products is significant and persistent, with a coefficient of variation of 37% for the median product. Price dispersion differs between product categories and over time. Store heterogeneity accounts for 30% of the observed variation in prices for the median product-month and for around 50% for the sample as a whole. Price dispersion is still prevalent after correcting for store heterogeneity.

Keywords: Price dispersion, retail prices, store heterogeneity

Suggested Citation

Moen, Espen R. and Wulfsberg, Fredrik and Aas, Øyvind, Price Dispersion and the Role of Stores (August 9, 2017). Available at SSRN: https://ssrn.com/abstract=3017152 or http://dx.doi.org/10.2139/ssrn.3017152

Espen R. Moen

BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442
Norway

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Fredrik Wulfsberg (Contact Author)

Oslo Business School ( email )

Pilestredet 35
Oslo, 0557
Norway

Øyvind Aas

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES) ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium

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