Will Small Retailers Survive? - A Demand Analysis using Multiple Stages

 

I have just updated the draft of my second thesis. Feedback is welcome.

Abstract. Will price competition with efficient big retailers drive out small apparel retailers? To find out I estimate price elasticities of in-store demand for 91 stores of 22 independent small fashion retailers in Austria. Demand is less price elastic than I expect from the level at which prices are set. For the majority of stores an increase in price seems to be profitible. I also estimate demand for 19 apparel categories. A price increase in any category has negative cross effects on almost all categories. The optimal category price is constraint by its effect on other categories.

https://dl.dropboxusercontent.com/u/19155359/DA2.pdf