title: Competition and product quality in the supermarket industry.
abstract: This article analyzes the effect of competition on a supermarket firm's incentive to provide product quality. In the supermarket industry, product availability is an important measure of quality. Using U.S. Consumer Price Index microdata to track inventory shortfalls, I find that stores facing more intense competition have fewer shortfalls. Competition from Walmart—the most significant shock to industry market structure in half a century—decreased shortfalls among large chains by about a third. The risk that customers will switch stores appears to provide competitors with a strong incentive to invest in product quality.
authors.affiliation: Northwestern University.
authors.forename: David A
authors.initials: DA
authors.lastname: Matsa
mesh_terms: D003132:Commerce / Q000191:economics / Q000266:history; D004032:Diet / Q000191:economics / Q000208:ethnology / Q000266:history; D004465:Economic Competition / Q000191:economics / Q000266:history; D019649:Food Industry / Q000191:economics / Q000193:education / Q000266:history; D059022:Food Safety; D005523:Food Supply / Q000191:economics / Q000266:history; D049673:History, 20th Century; D049674:History, 21st Century; D006795:Household Products / Q000191:economics / Q000266:history; D011634:Public Health / Q000191:economics / Q000193:education / Q000266:history; D012959:Socioeconomic Factors / Q000266:history; D014481:United States / Q000208:ethnology