Explaining Price Dispersion for Homogeneous Grocery Products

Aalto-Setälä Ville
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Aalto-Setälä Ville: National Consumer Research Centre, Helsinki, Finland

Journal of Agricultural & Food Industrial Organization, 2003, vol. 1, issue 1, 16

Abstract: This study examines the dispersion in prices for homogeneous grocery products, and studies the effect of product characteristics, demographic characteristics of consumers, and market structure on search costs and price dispersion. The findings show that price dispersion is affected by search costs. The variables that increased relative price dispersion the most were low budget share and low price of the product. Demographic characteristics affected price dispersion as well: a high proportion of families with children and a low medium income in the market area decreased dispersion in prices. Market structure did not affect price dispersion in the study data.

Keywords: pricing; search; imperfect information; market structure; retailing (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (3)

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DOI: 10.2202/1542-0485.1024

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