Fading choice
Transport costs and variety in consumer goods
Bibliographic Data
| ID | 9727618 |
|---|---|
| Authors | Jan Willem Gunning (0000-0002-8402-8793, Vrije Universiteit Amsterdam), Pramila Krishnan (ODID and University of Oxford, corresponding author), Andualem T Mengistu (International Monetary Fund), Andualem Mengistu (0000-0002-6822-2756, International Monetary Fund) |
| Year | 2024 |
| Volume | 91 |
| Issue | 363 |
| Pages | 1100-1123 |
| Publication date | 2024-07-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Economica (JOURNAL) |
| Journal identifiers | ISSN: 0013-0427 • E-ISSN: 1468-0335 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/ecca.12535 |
| OpenAlex | W4399051690 |
| Language | EN |
| Citations received | 1 |
| References cited | 28 |
We examine the spatial variation in variety of manufactured consumer goods to study how choice fades across space. We use data on 132 consumer goods and over 800 brands available from a purpose‐designed survey of fixed shops and periodic market stalls in towns and villages in Ethiopia. We find that local consumer choice fades, with fewer varieties in remoter villages. On average, these villages have approximately half the number of available items compared to their nearest market town. A fall in travel time of a half‐hour is associated with 4 extra goods and 9 brands. Variety also increases with inequality and market size. Furthermore, we estimate a model of heterogeneous consumers with a preference for variety and monopolistically competitive traders to disentangle the role of transport costs from the taste for variety, and to assess the consequences for prices. Our model estimates suggest that local consumer prices contain a markup of 8% above source town prices and transport costs. We demonstrate the significant costs to consumers from both low variety and high trade costs. Ignoring such costs means that poverty is underestimated in remote places. In turn, when infrastructure investments raise variety, the likely fall in poverty will be underestimated too
Business · Competition (biology) · Consumer choice · Economic growth · Economics · Economy · Goods and services · Microeconomics · Poverty · Preference · Revealed preference · Variety (cybernetics) · Economics of Agriculture and Food Markets · Global trade and economics · Marketing · Regional Economics and Spatial Analysis
The Impact of Agricultural Extension and Roads on Poverty and Consumption Growth in Fifteen Ethiopian Villages
Globalization and the Gains From Variety
The Variety and Quality of a Nation's Exports
Distorted Gravity
Income Distribution, Market Size, and Industrialization
Road Infrastructure and Enterprise Dynamics in Ethiopia
An Engel Curve for Variety
Road capacity, domestic trade and regional outcomes
Continuity and Change in China's Rural Periodic Markets
Restricting trade and reducing variety
The effect of distance and road quality on food collection, marketing margins, and traders' wages
On Measuring The Benefits Of Lower Transport Costs
Access to Markets and the Benefits of Rural Roads
The Poverty Impact of Rural Roads
Marketing and Social Structure in Rural China, Part I
| Unique citing works | 1 |
|---|---|
| Citations per year | 1 |
| Citation span | 2025 - 2025 (1) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 1 |