Welfare Costs of Shopping Trips

Hakan Yilmazkuday

No 2404, Working Papers from Florida International University, Department of Economics

Abstract: Using data on the number of visitors at the store level, this paper attempts to measure the welfare costs of traditional shopping trips for the U.S. census blocks. The investigation is based on an economic model, where individuals living in census blocks decide on which store to shop from based on the shopping-trip costs and idiosyncratic benefits. The welfare gains from removing shopping-trip costs in percentage terms are shown to depend on the weighted average of log distance measures between shopping stores and census blocks. The results show that the welfare gains from removing shopping-trip costs is about 4% for the average census block, with a range between 0.021% and 18% across census blocks that is further connected to their demographic or socioeconomic characteristics, especially their population density. Several practical policy implications follow regarding how shopping-trip costs can be reduced to achieve higher welfare gains.

Keywords: Store-Level Analysis; Census Block Groups; Shopping; Welfare (search for similar items in EconPapers)
JEL-codes: L81 R13 R41 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2024-06
New Economics Papers: this item is included in nep-inv, nep-tre and nep-ure
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https://economics.fiu.edu/research/working-papers/2024/2404.pdf First version, 2024 (application/pdf)

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Journal Article: Welfare costs of shopping trips (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:fiu:wpaper:2404

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