Applied Micro - El Hadi Caoui (Toronto)

Applied Microeconomics Seminar Series

Title: The Impact of Dollar Store Expansion on Local Market Structure and Food Access

Abstract: This paper studies the expansion of dollar store chains in the U.S. since 2008, which has caused growing public concern over the impact on retail markets and food accessibility. We show evidence that dollar store chains compete strongly with the grocery segment and that dollar store expansion has led to a large decline in the number of grocery stores, and significant reduction in fresh produce consumption for households with low income and high travel costs. We estimate a dynamic game of retail competition to understand the sources of dollar store success and calculate the net effects of dollar store expansion.