Retailers and Consumers: The Pass‐through of Import Price Changes

Abstract

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Tariffs Passing Through Retailers: Do Tariffs Actually Protect Domestic Manufacturers?

“…because manufacturers are competing only on the intensive margin and do not depend on an "all-or-nothing" decision like a consumer's choice of retail outlet. 2 This underlines the importance of the elasticity of the extensive margin and shows that the mechanisms described here are unique to the retail sector.…”

“…In an empirical study, Hellerstein (2009) analyzes the pass-through of exchange rate changes in the beer market and finds that a significant portion of the costs of exchange rate changes are borne by local retailers. Berner and Birg (2012) provide evidence that the pass-through in the retail sector depends on the type of outlet and may be different for consumers with different levels of income. This paper addresses the role of retailers for the effect of a tariff on domestic producers.…”

Tariffs and markups in retailing

“…The first assumption (dc i /dt i > 0) is very general. 3 It just states that a tariff raises the procurement costs of foreign products for local retailers. This assumption certainly holds if there is perfect competition in manufacturing (as in Eaton and Kortum, 2002) or if manufacturers charge a constant markup (as in Bernard et al, 2003), so that any tariff is perfectly passed on to retailers.…”

Tariff Pass-through in Wholesaling: Evidence from Firm-level Data in Japan✰

“…The second strand is the literature on the exchange-rate pass-through for wholesalers or retailers. Examples of relevant studies include Hellerstein (2008), Nakamura and Zerom (2010), Antoniades andZaniboni (2016), andBerner, Birg, andBoddin (2016). The results of these studies are mixed.…”