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Consumer shopping behavior: how much do consumers save?

Griffith, R.; Leibtag, E.; Leicester, A.; Nevo, A.; (2009) Consumer shopping behavior: how much do consumers save? Journal of Economic Perspectives , 23 (2) pp. 99-120. 10.1257/jep.23.2.99. Green open access

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Abstract

This paper documents the potential and actual savings that consumers realize from four particular types of purchasing behavior: purchasing on sale; buying in bulk (at a lower per unit price); buying generic brands; and choosing outlets. How much can and do households save through each of these behaviors? How do these patterns vary with consumer demographics? We use data collected by a marketing firm on all food purchases brought into the home for a large, nationally representative sample of U.K. households in 2006. We are interested in how consumer choice affects the measurement of price changes. In particular, a standard price index based on a fixed basket of goods will overstate the rise in the true cost of living because it does not properly consider sales and bulk purchasing. According to our measures, the extent of this bias might be of the same or even greater magnitude than the better-known substitution and outlet biases.

Type: Article
Title: Consumer shopping behavior: how much do consumers save?
Open access status: An open access version is available from UCL Discovery
DOI: 10.1257/jep.23.2.99
Publisher version: http://dx.doi.org/10.1257/jep.23.2.99
Language: English
Additional information: Copyright © 2009 AEA. Permission to make digital or hard copies of part or all of American Economic Association publications for personal or classroom use is granted without fee provided that copies are not distributed for profit or direct commercial advantage and that copies show this notice on the first page or initial screen of a display along with the full citation, including the name of the author. Copyrights for components of this work owned by others than AEA must be honored. Abstracting with credit is permitted. The author has the right to republish, post on servers, redistribute to lists and use any component of this work in other works. For others to do so requires prior specific permission and/or a fee. Permissions may be requested from the American Economic Association Business Office. Permissions may be requested from the American Economic Association Business Office.
UCL classification: UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/18798
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