“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 – 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)

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

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?

The use of pseudopanels McKenzie (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

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).

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

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

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%)

Further questions Shifts towards home production/consumption? – Less dinning out – More collective food production (comedores populares, 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