Essays on consumer welfare

The fast-changing retail industry (with its numerous new product developments and new marketing channels) has policy makers worried about possible detrimental effects of these changes for consumer welfare. Despite the interest of policy makers, only few marketing studies have considered the impact of retailing on consumer welfare. This dissertation contributes to the consumer welfare research from a marketing/retailing perspective.
In contrast to the marketing literature, where consumer welfare is a relatively understudied topic, the economics literature has long considered consumer welfare effects. The large majority of the economic literature examines changes in consumer welfare through a price effect. If an ‘event’ leads to lower prices for consumers, this event is considered to be welfare enhancing, as consumers’ purchasing power (or spending ability) goes up. Higher prices, on the other hand, are welfare destroying. However, consumer welfare is not just about lower prices. Consumers also benefit from having a variety of choices. There is value in having a range of options to choose from. Both the price component and the variety component of consumer welfare are addressed in the three empirical essays that make up this dissertation.