In this paper we analyze the effects of changing market structure on price dynamics of final goods in the emerging Czech retail market. We estimate the extent of upstream and downstream market power and find that changing market structure was responsible for an average yearly decrease in the prices of retailed products of 0.8 p.p. during 2000–2005. At the same time, however, we anticipate that the already started period of mergers and acquisitions could cause yearly increases in the prices of retailed products of 1.2 p.p. (approximately 0.5 p.p. in the CPI) over the next ten years.
JEL Codes: L1, L81.
Keywords: Market structure, retail market, transition economy.
Issued: November 2008
Published as: Podpiera, J. and M. Raková (2009): The Price Effects of an Emerging Retail Market, Eastern European Economics, 47(1) pp. 92-105.
Download: CNB WP No. 6/2008 (pdf, 260 kB)