Year: 2018
Type: report
Abstract: We study the behavior of markups in the retail sector.Markups are measured with gross margins computed at the product level using the replacement cost for every item.We find that: (1) markups are relatively stable over time and mildly procyclical; (2) there is a large regional dispersion in markups; (3) regions with higher incomes have higher markups; (4) these higher markups do not result from less intense competition or regional differences in marginal costs; and (5) regional differences in markups are due to variations in assortment, not to deviations from uniform pricing practices.We propose a simple model consistent with these facts.
DOI: 10.3386/w24434
Authors: Eric Anderson, Sergio Rebelo, Arlene Wong
Language: English
Subfield: Marketing
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2795249786