Welfare Costs of Shopping Trips

The Annals of Regional Science, Forthcoming

43 Pages Posted: 1 Apr 2021 Last revised: 8 Feb 2024

See all articles by Hakan Yilmazkuday

Hakan Yilmazkuday

Florida International University (FIU) - Department of Economics

Date Written: January 9, 2024

Abstract

Using data on the number of visitors at the store level, this paper attempts to measure the welfare costs of traditional shopping trips for the U.S. census blocks. The investigation is based on an economic model, where individuals living in census blocks decide on which store to shop from based on the shopping-trip costs and idiosyncratic benefits. The welfare gains from removing shopping-trip costs in percentage terms are shown to depend on the weighted average of log distance measures between shopping stores and census blocks. The results show that the welfare gains from removing shopping-trip costs is about 4% for the average census block, with a range between 0.021% and 18% across census blocks that is further connected to their demographic or socioeconomic characteristics, especially their population density. Several practical policy implications follow regarding how shopping-trip costs can be reduced to achieve higher welfare gains.

Keywords: Store-Level Analysis, Census Block Groups, Shopping, Welfare

JEL Classification: L81, R13, R41

Suggested Citation

Yilmazkuday, Hakan, Welfare Costs of Shopping Trips (January 9, 2024). The Annals of Regional Science, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3801142 or http://dx.doi.org/10.2139/ssrn.3801142

Hakan Yilmazkuday (Contact Author)

Florida International University (FIU) - Department of Economics ( email )

11200 SW 8th Street
Miami, FL 33199
United States

HOME PAGE: http://faculty.fiu.edu/~hyilmazk/

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