eduzhai > Applied Sciences > Transportation >

Hump-shaped Cross-price Effects and the Extensive Margin in Cross-border Shopping

  • Save

... pages left unread,continue reading

Document pages: 0 pages

Abstract: This paper examines the effect of cross-border shopping on grocery demand in Norway using monthly storexcategory sales data from Norway’s largest grocery chain 2011-2016. The sensitivity of demand to 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.

Please select stars to rate!

         

0 comments Sign in to leave a comment.

    Data loading, please wait...
×