Assessing Performance Impacts in Food Retail Distribution Systems: A Stochastic Frontier Model Correcting for Sample Selection

Timothy Park

Agricultural and Resource Economics Review, 2014, vol. 43, issue 3, 373-389

Abstract: A key organizational decision for retailers is whether to self-distribute or rely on a wholesaler-supplied network and yet little is known about the impact of this strategic choice on store-level productivity. We estimate a stochastic frontier model for food retailers that accounts for selectivity effects linked to the choice of distribution strategy. We find that adoption of data-sharing technologies has a positive impact on store-level gross margins of stores in self-distributing chains. Technical inefficiency among U.S. food retailers leads to a gross margin that is around $5,000 less for a conventional food retailer and about $7,670 less for a supercenter.

Date: 2014
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Journal Article: Assessing Performance Impacts in Food Retail Distribution Systems: A Stochastic Frontier Model Correcting for Sample Selection (2014)
Journal Article: Assessing Performance Impacts in Food Retail Distribution Systems: A Stochastic Frontier Model Correcting for Sample Selection (2014)
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