Welfare Costs of Shopping Trips
The Annals of Regional Science, Forthcoming
43 Pages Posted: 1 Apr 2021 Last revised: 8 Feb 2024
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: Suggested Citation