Working Paper

The Measurement of Retail Output and the Retail Revolution

Leonard Nakamura

Emeritus Economist

May 1997

WP 97-04 – The computerization of retailing has made price dispersion a norm in the United States, so that any given list price or transactions price is an increasingly imperfect measure of a product's resource cost.

As a consequence, measuring the real output of retailers has become increasingly difficult. Food retailing is used as a case study to examine data problems in retail productivity measurement. Crude direct measures of grocery store output suggest that the CPI for food-at-home may have been overstated by 1.4 percentage points annually from 1978 to 1996.

View the Full Working Paper