The Effects of Mandatory Disclosure of Supermarket Prices

We study how mandatory online disclosure of supermarket prices affects prices and price dispersion in brick-and-mortar stores. Using data collected before and after a transparency regulation went into effect in the Israeli food retail market, multiple complementary control groups and relying on a di...

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Bibliographic Details
Published in:Discussion paper (Makhon le-meḥḳar kalkali be-Yiśraʼel ʻal-shem Moris Falḳ) 2018-01 (4), p.1
Main Authors: Ater, Itai, Rigbi, Oren
Format: Article
Language:English
Subjects:
Advertising
Competition
Consumers
Data collection
Disclosure
Effects
Food
Impact analysis
Price levels
Prices
Pricing policies
Regulation
Research design
Retail stores
Supermarkets
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Summary:We study how mandatory online disclosure of supermarket prices affects prices and price dispersion in brick-and-mortar stores. Using data collected before and after a transparency regulation went into effect in the Israeli food retail market, multiple complementary control groups and relying on a differences-in-differences research design, we document a sharp decline in price dispersion and a 4-5% drop in prices following the transparency regulation. We discuss alternative explanations and highlight the roles of the media and advertising by showing that hard-discount chains changed their advertising strategy by referring extensively to the credible price-comparison surveys conducted by the media.
ISSN:0333-7839