Variation in Prices of Food Items in Jamaica: An Exploratory Analysis of Pricing Mechanisms of Supermarkets in Kingston

Abstract

The Jamaica Agriculture Market Information System reports wide variations in the price of similar food items across supermarkets in the capital city, Kingston. Possible explanations for this phenomenon are explored in this paper. Our findings indicate that supermarkets that practice price smoothing are more likely to persistently sell food items at the highest price. Likewise, supermarkets that are centrally located are prone to consistently have the highest price for food items. Whether or not farmers who supply food items to the supermarkets and consumers who buy from them are sensitive to price smoothing will provide validation for this practice by supermarkets. This constitutes an area of future study.