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Market Structure and Cost Pass-Through in Retail

Gee Hong and Nicholas Li ()

Staff Working Papers from Bank of Canada

Abstract: We examine the extent to which vertical and horizontal market structure can together explain incomplete retail pass-through. To answer this question, we use scanner data from a large U.S. retailer to estimate product level pass-through for three different vertical structures: national brands, private label goods not manufactured by the retailer and private label goods manufactured by the retailer. Our findings emphasize that accounting for the interaction of vertical and horizontal structure is important in understanding how market structure affects pass-through, as a reduction in double-marginalization can raise pass-through directly but can also reduce it indirectly by increasing market share.

Keywords: Inflation and prices; Transmission of monetary policy (search for similar items in EconPapers)
JEL-codes: E30 E31 L11 L16 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2013
New Economics Papers: this item is included in nep-com, nep-mac, nep-mkt and nep-opm
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Related works:
Journal Article: Market Structure and Cost Pass-Through in Retail (2017) Downloads
Working Paper: Market Structure and Cost Pass-Through in Retail (2013) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocawp:13-5

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