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Comments by Hugo Ñopo

“Buying Less, but Shopping More: The Use of Non-Market Labor During a Crisis” By David McKenzie and Ernesto Schargrodsky. Comments by Hugo Ñopo. This paper. Changes in shopping behavior (channels and days) during an economic crisis (Argentina 2002). Buying less, but shopping more

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Comments by Hugo Ñopo

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  1. “Buying Less, but Shopping More: The Use of Non-Market Labor During a Crisis”By David McKenzie and Ernesto Schargrodsky Comments by Hugo Ñopo

  2. This paper • Changes in shopping behavior (channels and days) during an economic crisis (Argentina 2002). • Buying less, but shopping more • Paying lower prices for the same products and downgrading quality • Savings of 4% in the cost of food, beauty and cleaning products (mitigating 40% of the fall in food expenditure). • It is a more prevalent mechanism than other more studied strategies (labor and credit)

  3. The use of LatinPanel • 3000 households (half of them from Buenos Aires) from 2000 to 2002 • Observations at the (aggregated) household level -> pseudopanels • No info on earnings (which was estimated from other sources) • 16.7% of total HHs expenditures • 44.5% of total food consumed at home

  4. The use of LatinPanel (2) • Focus on shopping • Using only info on searches that ended up in a transaction (neglecting the time spent on info acquisition) • No info on time use • No info on consumption • Not exploiting food from social programs (because it’s not shopping…) • It misses other “modern” forms of shopping • Internet shopping?

  5. The use of pseudopanelsMcKenzie (2004), Altman and McKenzie (2007) • Average behaviors, collapsed info • Within-cell variability is neglected • Cells had between 1 and 62 households within it • Cells defined with time-variant characteristics • Location, HH size, Housewife’s age, youngest children’s age • (almost) No concerns about panel attrition, but some others about cells composition

  6. The 2002 Crisis in Argentina • The corralito effects • Cash withdrawals limited to 250 dollars per week (per account? per individual? per HH?) • Restrictions that are not binding for all HHs (no wonder why the effect is barely significant for the overall economy). • The shopping frequency increase could merely be a mechanical response to the restrictions for some HHs (but it’s not possible to identify them).

  7. The Basic Specification • Shopping Freq = f(income, Z, X, q) • q’s are serially correlated (a HH inventory issue) • income =φ(X) • Z does not affect HHs in a homogenous way • The example of the effect of inflation on the optimal number of withdrawals per month. • It basically depends on the individuals’ type of employment (employees vs. entrepreneurs) • The corralito example

  8. As the relationship between q and Shopping Freq could be merely mechanic, they do: Shopping Freq per Peso= f(income, Z, X) • But the inventory/consumption problem persists

  9. Other specifications • Price=f(Shopping Freq, X) • Shared of Priced Goods= f(Shopping Freq) • An extra channel-day is linked to: • 18% drop in prices paid for the same products • 2% saving from switching to priced goods • The income fall of the crisis induced a 3% increase in channel-days • Combining both -> 4% savings in consumption (recall the fall in real expenditure was 10.6%)

  10. Further questions • Shifts towards home production/consumption? • Less dinning out • More collective food production (comedorespopulares, ollas comunes) • What other HH duties get sacrificed? • Family time? Investments on child development? • Info on time use… • Who does the extra shopping? • Intra-household dynamics

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