Consumer Benefits from Increased Competition in Shopping Outlets: Measuring the Effect of Wal-Mart

34 Pages Posted: 19 Feb 2006 Last revised: 9 Oct 2022

See all articles by Jerry A. Hausman

Jerry A. Hausman

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

Ephraim Leibtag

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Date Written: December 2005

Abstract

Consumers often benefit from increased competition in differentiated product settings. In this paper we consider consumer benefits from increased competition in a differentiated product setting: the spread of non-traditional retail outlets. In this paper we estimate consumer benefits from supercenter entry and expansion into markets for food. We estimate a discrete choice model for household shopping choice of supercenters and traditional outlets for food. We have panel data for households so we can follow their shopping patterns over time and allow for a fixed effect in their shopping behavior. We find the benefits to be substantial, both in terms of food expenditure and in terms of overall consumer expenditure. Low income households benefit the most.

Suggested Citation

Hausman, Jerry A. and Leibtag, Ephraim, Consumer Benefits from Increased Competition in Shopping Outlets: Measuring the Effect of Wal-Mart (December 2005). NBER Working Paper No. w11809, Available at SSRN: https://ssrn.com/abstract=875685

Jerry A. Hausman (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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Ephraim Leibtag

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

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