Research

Work in Progress

"Price Knowledge and Grocery Shopping Behavior" with Richard Friberg, Frode Steen, and Simen A. Ulsaker

"Competition and Grocery Retail Formats: Empirical Evidence from a Horizontal Acquisition in Norway"

Abstract

The Norwegian grocery retail market underwent a sharp change in ownership concentration and store format positioning when the fourth-largest company was acquired by the second-largest in 2015. Several convenience discount stores and supermarkets were rebranded as soft discount stores, which have become increasingly dominant in recent years, comprising a total market share of 61% in 2020. A store-level difference-in-differences analysis of one of the established soft discount chains shows that rival stores rebranding to a new soft discount format is associated with decreased sales by between 7% and 12.9% and a reduction in product variety by approximately 1%. Consistent with uniform nationwide pricing, there was no unilateral price adjustment at the store level, but national real food prices declined by approximately 4-5% compared to neighboring countries after the acquisition. The empirical findings suggest increased competition in the soft discount segment and, subsequently, the industry as a whole.

Published Articles

"The effect of cross-border shopping on commodity tax revenue: results from Norway's COVID-19 border closings" with Richard Friberg, Frode Steen, and Simen A. Ulsaker

Abstract

We use grocery data from Norway and COVID-19 border closings to gauge the effect of cross-border shopping on commodity tax revenue. Detailed store–category-level data identify differential treatment effects that depend on distance to Swedish stores. Economically significant effects extend to up to two hours' drive from the border, and even further for prominent cross-border shopping products, such as beer, cigarettes, and carbonated soft drinks. Across all products, cross-border shopping decreases tax revenue from VAT by 3.6 percent at the national level. National commodity tax revenue from carbonated soft drinks (subject to a sugar tax) is reduced by 8.1 percent and from cigarettes by 11.9 percent.

Master's Thesis

"How Efficient Is Vinmonopolet’s Pricing Policy?" with Ola Kristoffer Nestvold

Abstract

This paper uses an empirical approach to investigate how Vinmonopolet’s current pricing policy affects their electronic wine auctions by looking at how the binding reserve price affects the auction outcomes and how the current policy fares against the theoretical optimal reserve price. We use comprehensive data from Vinmonopolet, containing information on all electronic wine auctions hosted in Norway since 2013. By estimating the bidders’ willingness to pay and bidder participation, we are able to conduct counterfactual analyses on how changes in the reserve price and bidder participation affects both expected revenue and allocative efficiency. We find it is implausible that Vinmonopolet determines the reserve price on either criterion of revenue maximization or optimal allocation, since the reserve price is not conditioned on the sellers’ valuation. However, Vinmonopolet’s current pricing policy – setting the reserve price equal to 80% of their value assessment – fares well against the theoretical optimal reserve price in the majority of the auctions. This is largely due to reserve prices having a small effect on the wine auctions in general. Finally, we show that bidder participation is the main driver of the expected revenue of an auction, and increasing bidder participation reduces the probability of the reserve price affecting the auction outcomes. Hence, increasing bidder participation serves as a possible remedy for inefficient reserve prices.