The Impact of Negative Income Shocks on the Relative Prices of Private Label Products: The Covid-19 Episode
| Title: | The Impact of Negative Income Shocks on the Relative Prices of Private Label Products: The Covid-19 Episode | |
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Number: |
23/09 |
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Author(s): |
Serdar Yürek | |
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Language: |
English | |
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Date: |
December 2023 |
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Abstract: |
In this study, we show the relationship between households’ income and the relative prices of private label products (relative to the prices of national brand products), known as lower quality and cheaper alternatives to national brands. By employing retail-product level micro price data from nine different supermarket chains in Türkiye, we exploit the sudden and unexpected income losses caused by Covid-19 measures within a difference in differences setting. Our results show that when households experience income shocks, the relative prices of private label products increase significantly. Therefore, our results indicate that the relative prices of lower quality products are significantly affected by households’ income. | |
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Keywords: |
Difference-in-Differences, Private label products, Supermarket prices, Covid-19, Lower quality products | |
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JEL Codes: |
C21; D22; E21; E31 | |