The prices we pay: Why they matter and where they come from

The extent to which people shop around for the best price for products varies by income level. Households on relatively lower incomes tend to spend more time hunting for bargains and often choose budget options for products where possible. This column presents new evidence using consumer data from the United States, highlighting how prices differ across income groups. It shows how retailers’ response to households’ shopping behaviour reduces inequalities and provides policy-makers with useful lessons for supporting lower-income households.