The role of geographic market definition in analysis of grocery retailing
研究了家庭食品需求弹性和商店利润率如何随地理市场范围变化，发现市场范围越大，需求弹性越大、利润率越低，忽视地域竞争会高估需求弹性、低估利润率。
Abstract We examine how estimates of household food demand elasticities and store profit margins vary with alternative geographic market extents using structural models of household store choice and retailer competition. Our consumer store choice model is novel, simultaneously accounting for the heterogeneity of store choice sets, households' travel distance to stores, and their store‐specific shopping basket prices. We estimate the models using a unique combination of datasets on grocery purchases. We find that the geographic market extent is positively associated with household demand elasticity and negatively associated with store profit margins. The maximum market extent at which changes in demand elasticities become statistically insignificant varies by retailers, ranging between 10 and 16 km. These findings are robust to alternative assumptions of store competition. Our results imply that overlooking the locality of retail competition can result in overestimating the magnitudes of household demand elasticities while underestimating store profit margins, characterizing a relatively more competitive market.