Hump-Shaped Cross-Price Effects and the Extensive Margin in Cross-Border Shopping

Autor:	Frode Steen, Richard Friberg, Simen A. Ulsaker
Rok vydání:	2022
Předmět:	Margin (machine learning) Econometrics Economics Sensitivity (control systems) Product differentiation Fixed cost General Economics Econometrics and Finance
Zdroj:	American Economic Journal: Microeconomics. 14:408-438
ISSN:	1945-7685 1945-7669
DOI:	10.1257/mic.20190302
Popis:	This paper examines the effect of cross-border shopping on grocery demand in Norway using monthly store × category sales data from Norway’s largest grocery chain 2012–2016. The sensitivity of demand to the foreign price is hump-shaped and greatest 30–60 minutes’ driving distance from the closest foreign store. Combining continuous demand, fixed costs of cross-border shopping, and linear transport costs a la Hotelling, we show how this hump shape can arise through a combination of intensive and extensive margins of cross-border shopping. Our conclusions are further supported by novel survey evidence and cross-border traffic data. (JEL D12, F31, L11, L81)
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_dedup___::63394bb9e179c69c056b115586b6f622 https://doi.org/10.1257/mic.20190302 Zobrazit plný text záznamu