SHOPPING HOURS AND PRICE LEVELS IN THE RETAILING INDUSTRY: A THEORETICAL AND EMPIRICAL ANALYSIS

Abstract

We explore the effect of extended shopping hours on the demand faced by small and large stores and on their prices. Our theoretical model predicts that prices at large stores will increase after opening hours are deregulated. We then test this prediction using a set of Quebec data collected before and after the deregulation of opening hours in July 1990. The results support our view that prices have increased at large stores since deregulation and that consumers pay for greater shopping flexibility.