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Cost of Being Poor: Retail Price and Consumer Price Search Differences across Inner-City and Suburban Neighborhoods

Cost of Being Poor: Retail Price and Consumer Price Search Differences across Inner-City and... This research undertakes a carefully designed and detailed empirical study to gain insights into (1) the extent of price differentials between wealthy and poor neighborhoods; (2) what induces such differentials, especially the nature and intensity of competitive environments, including mass merchandisers like Wal-Mart; and (3) their relative impacts. It finds a price differential of about 10%–15% for everyday items. Even after controlling for store size and competition, prices are found to be 2%–5% higher in poor areas. It also finds that it is not the poverty level per se but access to cars that acts as a key determinant of consumers' price search patterns. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Consumer Research Oxford University Press

Cost of Being Poor: Retail Price and Consumer Price Search Differences across Inner-City and Suburban Neighborhoods

Talukdar, Debabrata
Journal of Consumer Research , Volume 35 (3): 15 – Oct 1, 2008
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References (25)

Publisher
Oxford University Press
Copyright
© 2008 by JOURNAL OF CONSUMER RESEARCH, Inc.
ISSN
0093-5301
eISSN
1537-5277
DOI
10.1086/589563
Publisher site
See Article on Publisher Site

Abstract

This research undertakes a carefully designed and detailed empirical study to gain insights into (1) the extent of price differentials between wealthy and poor neighborhoods; (2) what induces such differentials, especially the nature and intensity of competitive environments, including mass merchandisers like Wal-Mart; and (3) their relative impacts. It finds a price differential of about 10%–15% for everyday items. Even after controlling for store size and competition, prices are found to be 2%–5% higher in poor areas. It also finds that it is not the poverty level per se but access to cars that acts as a key determinant of consumers' price search patterns.

Journal

Journal of Consumer Research – Oxford University Press

Published: Oct 1, 2008

Keywords: Pricing; Information Search/Acquisition; Minority Issues; Public Policy Issues; Survey Research

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