Premium
Price Dispersion and the Role of Stores *
Author(s) -
Moen Espen R.,
Wulfsberg Fredrik,
Aas Øyvind
Publication year - 2020
Publication title -
the scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/sjoe.12356
Subject(s) - price dispersion , dispersion (optics) , homogeneous , norwegian , economics , product (mathematics) , econometrics , sample (material) , mathematics , chemistry , linguistics , philosophy , physics , geometry , chromatography , combinatorics , optics
In this paper, we study price dispersion in the Norwegian retail market for 766 products across 4,297 stores over 60 months. Price dispersion for homogeneous products is significant and persistent, with a coefficient of variation of 37 percent for the median product. Price dispersion differs between product categories and over time. Store heterogeneity accounts for 30 percent of the observed variation in prices for the median product–month, and for around 50 percent for the sample as a whole. Price dispersion is still prevalent after correcting for store heterogeneity.