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Hump-shaped cross-price effects and the extensive margin in cross-border shopping
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Hump-shaped cross-price effects and the extensive margin in cross-border shopping

Frode Steen, Simen A. Ulsaker and Richard Friberg
VoxEU
Centre for Economic Policy Research (CEPR)
2019-07

Abstract

Competition Policy Europe's nations and regions Industrial organisation consumers Pricing Supermarkets groceries shopping costs Norway Sweden
Consumers often travel to neighbouring countries to shop at cheaper prices. This column uses sales data from a Norwegian grocery chain to examine how cross-border shopping into Sweden responds to changes in relative prices. It shows that the response to price changes is highest at some distance from the border, where consumers respond by reconsidering whether or not to travel abroad for their shopping.
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