IKEA: Product, pricing, and pass-through

With over 300 stores in 40 countries, IKEA is a major international presence in retail housewares and furnishings. IKEA publishes country-specific catalogs with local-currency prices guaranteed to hold for 1 year. This paper explores a new dataset of IKEA products and catalog prices covering six cou...

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Bibliographic Details
Published inResearch in economics Vol. 71; no. 3; pp. 507 - 520
Main Authors Baxter, Marianne, Landry, Anthony
Format Journal Article
LanguageEnglish
Published Elsevier Ltd 01.09.2017
Subjects
IKEA
Law of One Price
Multinational pricing
Product creation
Purchasing power parity
Multinational pricing
Product creation
IKEA
Purchasing power parity
Law of One Price
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Summary:With over 300 stores in 40 countries, IKEA is a major international presence in retail housewares and furnishings. IKEA publishes country-specific catalogs with local-currency prices guaranteed to hold for 1 year. This paper explores a new dataset of IKEA products and catalog prices covering six countries for the time period 1994–2010. The dataset, with over 140,000 observations, is uniquely poised to shed light on the way in which a large multinational retailer operates in a setting characterized by a very large number of identical goods which are priced in local currency in many countries. The goal of this paper is to document the choices made by IKEA in several related decision areas. In doing so, this paper provides evidence against which existing theories can be evaluated and revised in the light of this new information.
ISSN:1090-9443
1090-9451
DOI:10.1016/j.rie.2017.03.003