The Impact of Negative Income Shocks on the Relative Prices of Private Label Products: The Covid-19 Episode

Serdar Yurek

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: In this study, we show the relationship between households’ income and the relative prices of private label products (relative to the prices of national brand products), known as lower quality and cheaper alternatives to national brands. By employing retail-product level micro price data from nine different supermarket chains in Türkiye, we exploit the sudden and unexpected income losses caused by Covid-19 measures within a difference in differences setting. Our results show that when households experience income shocks, the relative prices of private label products increase significantly. Therefore, our results indicate that the relative prices of lower quality products are significantly affected by households’ income.

Keywords: Difference-in-Differences; Private label products; Supermarket prices; Covid-19; Lower quality products (search for similar items in EconPapers)
JEL-codes: C21 D22 E21 E31 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:tcb:wpaper:2309

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