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Retail Pricing Patterns and Driving Factors of Price Variation

Chenguang Li and Richard Volpe

No 169730, 88th Annual Conference, April 9-11, 2014, AgroParisTech, Paris, France from Agricultural Economics Society

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; Production Economics; Research Methods/ Statistical Methods (search for similar items in EconPapers)
Pages: 16
Date: 2014-04
New Economics Papers: this item is included in nep-com, nep-ind and nep-mkt
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aesc14:169730

DOI: 10.22004/ag.econ.169730

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