En undersökning av svenska livsmedelspriser: Vilka faktorer påverkar prissättningen?
(2022) NEKH04 20221Department of Economics
- Abstract
- The main objective of this paper is to investigate price determining factors in Swedish grocery retailing. By combining economic theory with linear regression analysis the paper wishes to shed light on what kind of factors that are affecting Swedish food retailers when they are pricing food products. Different food retailers face different conditions when it comes to competition, demand, locality and costs. These varying conditions should matter, and it seems rational to think that they should affect stores’ pricing behavior. Lower firm concentration on a local market should result in more intense price competition and implicate lower prices. Also, by taking into account nearby competitors' eventual low-price profile, grocery stores should... (More)
- The main objective of this paper is to investigate price determining factors in Swedish grocery retailing. By combining economic theory with linear regression analysis the paper wishes to shed light on what kind of factors that are affecting Swedish food retailers when they are pricing food products. Different food retailers face different conditions when it comes to competition, demand, locality and costs. These varying conditions should matter, and it seems rational to think that they should affect stores’ pricing behavior. Lower firm concentration on a local market should result in more intense price competition and implicate lower prices. Also, by taking into account nearby competitors' eventual low-price profile, grocery stores should lower their prices according to the strategic complement feature of Bertrand competition. Consumers also differ in their demands and in areas with a higher income stores can charge higher prices. Factors such as size and geographic positioning means different costs for different stores. Bigger stores should be able to offer lower prices because of the occurrence of economies of scale. Depending on where a store is situated costs such as rent will vary and also differences in how qualitative a store wishes to be will also entail different costs. The key findings of this paper are in many ways in accordance with economic theory. Further distances to a stores’ nearest competitor and hence a higher concentration implies higher prices. If the nearest competitor has a low-price profile prices tend to be lower. Income in the area where a store is located does not seem to have an effect on price while prices decrease with the size of a store and increase with population density. The results suggest that a large part of the pricing of Swedish grocery retailers can be explained by this paper's included theory and empirics but further study with a larger data set and additional relevant independent variables is still needed. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9082986
- author
- Lindgren, Baltsar LU
- supervisor
- organization
- course
- NEKH04 20221
- year
- 2022
- type
- M2 - Bachelor Degree
- subject
- keywords
- Pricing, food products, price competition, price discrimination, market concentration, costs
- language
- Swedish
- id
- 9082986
- date added to LUP
- 2022-10-10 09:17:17
- date last changed
- 2022-10-10 09:17:17
@misc{9082986,
abstract = {{The main objective of this paper is to investigate price determining factors in Swedish grocery retailing. By combining economic theory with linear regression analysis the paper wishes to shed light on what kind of factors that are affecting Swedish food retailers when they are pricing food products. Different food retailers face different conditions when it comes to competition, demand, locality and costs. These varying conditions should matter, and it seems rational to think that they should affect stores’ pricing behavior. Lower firm concentration on a local market should result in more intense price competition and implicate lower prices. Also, by taking into account nearby competitors' eventual low-price profile, grocery stores should lower their prices according to the strategic complement feature of Bertrand competition. Consumers also differ in their demands and in areas with a higher income stores can charge higher prices. Factors such as size and geographic positioning means different costs for different stores. Bigger stores should be able to offer lower prices because of the occurrence of economies of scale. Depending on where a store is situated costs such as rent will vary and also differences in how qualitative a store wishes to be will also entail different costs. The key findings of this paper are in many ways in accordance with economic theory. Further distances to a stores’ nearest competitor and hence a higher concentration implies higher prices. If the nearest competitor has a low-price profile prices tend to be lower. Income in the area where a store is located does not seem to have an effect on price while prices decrease with the size of a store and increase with population density. The results suggest that a large part of the pricing of Swedish grocery retailers can be explained by this paper's included theory and empirics but further study with a larger data set and additional relevant independent variables is still needed.}},
author = {{Lindgren, Baltsar}},
language = {{swe}},
note = {{Student Paper}},
title = {{En undersökning av svenska livsmedelspriser: Vilka faktorer påverkar prissättningen?}},
year = {{2022}},
}