Driving Factors of Retail Price Variation

Chenguang Li and Richard Volpe ()

No 150486, 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. from Agricultural and Applied Economics Association

Abstract: This study explores the strategic pricing behaviors across retail chains for produce products. We adopt a Panel-VAR model to identify the driving factors of retail price variation and find that retail price history, competition, product cost are among the key drivers of retail price change. Forecast Error Variance Decomposition (FEVD) is used to quantify the relative impact of driving factors to retail price changes and show how they affect prices differently across retail chains. We also find that higher responsiveness to competition may indicate superior management ability in price setting that associates with better profitability in practice.

Keywords: Demand and Price Analysis; Food Consumption/Nutrition/Food Safety; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 2
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea13:150486

DOI: 10.22004/ag.econ.150486

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