Scandinavian Working Papers in Economics

SSE/EFI Working Paper Series in Economics and Finance,
Stockholm School of Economics

No 318: Retail price levels and concentration of wholesalers, retailers, and hypermarkets

Marcus Asplund and Richard Friberg ()
Additional contact information
Marcus Asplund: Dept. of Economics, Stockholm School of Economics, Postal: P.O. Box 6501, S-113 83 Stockholm, Sweden
Richard Friberg: Dept. of Economics, Stockholm School of Economics, Postal: P.O. Box 6501, S-113 83 Stockholm, Sweden

Abstract: This paper examines retail grocery price levels with a very large (unbalanced) panel of stores that operate in well-defined local markets. We explain price variation across grocery retailers by the concentration of wholesalers and retailers, and the market share of hypermarkets (and control for a number of store and region specific factors). Our most important result is that concentration at the wholesale level is an important determinant of retail prices. The price effect of retail concentration and hypermarket market share are statistically significant but small in economic terms.

Keywords: Firm concentration; market structure; price competition; grocery retail; grocery wholesale

JEL-codes: D43; L13; L81

27 pages, May 12, 1999

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