Food Banks and Retail Markups

40 Pages Posted: 15 Dec 2020

See all articles by John Lowrey

John Lowrey

Ohio State University (OSU), Fisher College of Business

Timothy J. Richards

Arizona State University W. P. Carey School of Business

Stephen F. Hamilton

California State Polytechnic University, San Luis Obispo

Date Written: December 6, 2020

Abstract

Food banks play a critical part in the food distribution system. In this paper, we examine the impact of food bank donations on retailer markups using a unique store-level data set on donations, labor employment, sales, and capital employment. We frame our empirical model of food bank donations and store-level markups in terms of a theoretical model of quality-based price discrimination and retail sales. We find that stores that donate more food to the local food bank are able to charge higher markups - 33% higher - after controlling for the well-known endogeneity problems that bedevil production analysis. Our findings suggest that donations are not necessarily only altruistic gestures on the part of retailers, but rather part of a symbiotic relationship between food banks and food retailers.

Keywords: Food banks, food retailing, markups, price discrimination, production economics

JEL Classification: D43, L13, M31

Suggested Citation

Lowrey, John and Richards, Timothy J. and Hamilton, Stephen F., Food Banks and Retail Markups (December 6, 2020). Available at SSRN: https://ssrn.com/abstract=3743626 or http://dx.doi.org/10.2139/ssrn.3743626

John Lowrey

Ohio State University (OSU), Fisher College of Business ( email )

2100 Neil Avenue
Columbus, OH
United States
614-214-5088 (Phone)

Timothy J. Richards (Contact Author)

Arizona State University W. P. Carey School of Business ( email )

7231 E. Sonoran Arroyo Mall
Mesa, AZ 85212
United States
480-727-1148 (Phone)

HOME PAGE: http://www.east.asu.edu/msabr/faculty/richards.htm

Stephen F. Hamilton

California State Polytechnic University, San Luis Obispo ( email )

San Luis Obispo, CA 93407
United States
805-756-2555 (Phone)

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