Code for: Lack of Uniform Prices or Lack of Uniform Retailers?

Summary:  View help for Summary Standard models assume that food retail chains set uniform prices across stores, following the evidence in DellaVigna and Gentzkow (2019). We first show that the extent of uniform pricing varies across products within food categories. Second, even if prices were nearly uniform at the product–chain level, systematic cross-market differences in chain and product composition could still generate spatial variation in effective price levels. We find substantial heterogeneity in retailer composition and characteristics across MSAs: poorer MSAs are served by fewer retail chains while having a disproportionately larger share of large (national) retailers. Furthermore, we show that poorer MSAs have less product variety, driven not only by fewer retailers overall but also by fewer products offered by the same retailer in those markets. Failing to account for this heterogeneity in retailer composition leads to understating differences in effective price levels between poor and rich areas. These results complement Kim and Navarrete (2025), who document spatial heterogeneity in food inflation, and highlight cross-market differences in retail market structure as a key channel accounting for this variation.

Subject Terms:  View help for Subject Terms Inflation; Retailer Market Structure; Price Dispersion

JEL Classification:  View help for JEL Classification
      E31 Price Level; Inflation; Deflation
      L11 Production, Pricing, and Market Structure; Size Distribution of Firms
      R12 Size and Spatial Distributions of Regional Economic Activity