Another "Wal-Mart Effect" UPDATED

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Here's a surprise: Wal-Mart is all over the blogosphere.

Instapundit has links to the NYT story of Wal-Mart and the Merry PR Hacks. Meanwhile, Fast Company's blog is being guest-edited by Charles Fishman, author of The Wal-Mart Effect. Here's a story at the Economist about the book.

And, finally, the real reason I bring this up: a new working paper at NBER titled "Consumer Benefits from Increased Competition in Shopping Outlets: Measuring the Effect of Wal-Mart." (Here's an older - PDF! - version of the paper from the MIT faculty site.)

An interesting excerpt:

In this paper we estimate consumer benefits from supercenter entry and expansion into markets for food. We estimate a discrete choice model for household shopping choice of supercenters and traditional outlets for food. We have panel data for households so we can follow their shopping patterns over time and allow for a fixed effect in their shopping behavior. Most households shop at both supercenters and traditional outlets during the period. Given a model of shopping behavior we estimate the compensating variation of household from the presence of supercenters. We find the benefits to be substantial. Thus, while we do not estimate the costs to workers who may receive lower wages and benefits, we find the effects of supercenter entry and expansion to be sufficiently large so that overall we find it to be extremely unlikely that the expansion of supercenters does not confer a significant overall benefit to consumers.

UPDATE: Here are a couple more links of interest. Hausman's work is discussed by the MIT news service. (This article also links to the wonderfully titled "CPI Bias From Supercenters: Does the BLS Know that Wal-Mart Exists?") There are PDF versions of slides available that detail the work done in the working paper linked to above.

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Wal-Mart? What's that? Anyway, here's my view of the PR hack story.


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This page contains a single entry by published on March 7, 2006 3:52 PM.

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