Essays on Consumer Behavior and Retail Regulation

Ethan Mallick Hossain, University of Pennsylvania

Abstract

The retail sector is one of constant innovation, where retailers relentlessly compete for customers by providing new products, better service, and attractive prices. At the same time, regulators must keep pace with these innovations to ensure that markets are fair and consumers are protected. This dissertation is composed of three chapters that examine the interactions of consumer behavior and retail regulation. The first chapter examines how bulk buying varies by household income and analyzes the factors that affect a household's bulk buying decision. Using reduced-form methods and detailed household-level purchase data, I show that many factors, including the cognitive costs of computing unit prices, store preferences, storage costs, and budget constraints, affect a household's bulk buying. I then estimate a discrete-choice model that incorporates cognitive costs and storage costs and find that mandating the display of unit prices would substantially increase bulk buying and lower the unit prices paid by households, especially low-income households. The second chapter studies how imposing sales taxes on previously tax-free online purchases affects household shopping behavior. Historically, e-commerce was an easy way for consumers to avoid sales taxes, but over the past decade, online retailers were required to collect sales taxes, negating the structural price advantage they had. Using detailed online shopping and browsing data, I find that in response to sales tax collection, households reduce their spending at taxed online retailers, but find no evidence that households change their search behavior or offline shopping expenditures. The third chapter analyzes whether welfare transfers are linked to lottery gambling. A minority of lottery retailers are eligible to accept Supplemental Nutrition Assistance Program (SNAP) benefits, but these stores account for a majority of lottery sales. By combining novel data on store-level lottery sales with a range of policy shocks to the SNAP program, this chapter finds that SNAP benefits decrease lottery gambling, likely by decreasing shopping frequency, and therefore, the number of lottery gambling opportunities.

Subject Area

Economics

Recommended Citation

Hossain, Ethan Mallick, "Essays on Consumer Behavior and Retail Regulation" (2020). Dissertations available from ProQuest. AAI27742789.
https://repository.upenn.edu/dissertations/AAI27742789

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