Is Wal-Mart Good for Competition? Evidence from Milk Prices

Rebecca Cleary () and Rigoberto Lopez

No 101, Food Marketing Policy Center Research Reports from University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy

Abstract: This article examines the impact of Wal-Mart Supercenters’ entry on incumbents’ pricing behavior and demand. Using a structural model and milk data from the Dallas/Fort Worth supermarket chains, empirical results show that an expansion of Supercenters caused incumbents to price milk significantly more competitively, dropping on average 22.5% between 1996 and 2002, in spite of declines in their milk demand. Furthermore, consumer gains exceeded incumbent losses, lending further support to the notion that Wal-Mart is good for competition and consumers.

Keywords: Wal-Mart; competition; conduct; entry; supermarkets; food retailing (search for similar items in EconPapers)
JEL-codes: L10 L19 L59 L66 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2007-10
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zwi:fpcrep:101

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