Documentation Deviations

March 3, 2010

Documents deviations program and data used The Diffusion of Wal-Mart and Economies of Density,” Econometrica, Vol. 79, No. 1 (January, 2011), 253-302

by Thomas Holmes

Date File pert_pv_complete.asc

800,353 x 24

Each row is a different pairwise deviation. Each column is a below:

re is:

Column	Variable	Description
1	type_of_deviation (in program is type_tom)	=1 then density decreasing =2 then density increasing =31 or 32 then a change within the same state, more then 2 years aport
2	convert_cat	=1 means store opening (general merchandise) is changed but not a conversion of super center timing =2 change order of supercenter conversion
3	store1	store number of earliest store opened of the deviation pair
4	store2	store number of later store opened of the deviation pair
5	year_open1	year store1 opened
6	year_super1	year store 1 became a supercenter (=9999 if never a supercenter)
7	year_open2	year store 2 opened
8	year_super2	year store 2 became a supercenter (=9999 if never a supercenter)
9	pert_id	an identification number
10	n1	population density in 1990 (number of people in thousands within 5 miles of store location 1), Popden for 1990 in paper
11	n2	population density in 1990 (number of people in thousands within 5 miles of store location 2) Popden for 1990 in paper
12	ΔП (d_opprof)	sum of general merchandise and food operating profit
13	ΔD (d_dc_dist)	sum of gen merchandise and food distribution mile differences
14	ΔC1 (d_lnneig5)	see paper, includes gen and food (food if applicable)
15	ΔC2 (d_lnneig5_2)	see paper, includes gen and food (food if applicable)
16	weight_factor	take beginning year of the perturbation. Then weight_factor=1/(.95^(year-1962));
17	d_opprof_gen	Variables 17-24 are the same as 12-15, only with a breakdown by general merchandise and food
18	d_opprof_groc	see 17
19	d_dc_gen_dist	see 17
20	d_dc_groc_dist	see 17
21	d_lnneig5_gen	see 17
22	d_lnneig5_groc	see 17
23	d_lnneig5_2_gen	see 17
24	d_lnneig5_2_groc	see 17

Program bound_estimation_specification1.prg

First step is to read in a gauss matrix format version of this file.

Next it determines what sample to use.

For the type 2 deviations, I require that ΔD>=150.

These lines also allow me to pick year_start and year_end for the earlier opening year of the deviation.

In the example, year_start=0 and year_end=9999.

Note that the deviation differences in the file were calculated as follows:

I first ran the equivalent of program in model_calculations to calculate for the various opening policy the present value of sales (sal_gen for general merchandise, sal_groc for food), distance, F₁ and F₂., etc. These are prevent value as of 1962. Then the following were calculated: (noting that 0 means the policy actually chosen)

The code used to create the variables is as follows.

d_sal_gen= sal_gen0- sal_gen ; *i.e. difference in present value of sales between actul and deviation for general merchansise

d_sal_groc= sal_groc0- sal_groc;

d_wage_gen = wage_gen0- wage_gen;

d_wage_groc = wage_groc0- wage_groc;

d_rent_gen = rent_gen0- rent_gen;

d_rent_groc = rent_groc0- rent_groc;

d_lnneig5_gen= lnneig5_gen0- lnneig5_gen;

d_lnneig5_2_gen=lnneig5_2_gen0- lnneig5_2_gen;

d_lnneig5_groc= lnneig5_groc0- lnneig5_groc;

d_lnneig5_2_groc=lnneig5_2_groc0- lnneig5_2_groc;

d_dc_gen_dist= dc_gen_dist0- dc_gen_dist;

d_dc_groc_dist= dc_groc_dist0- dc_groc_dist;

labor_requirement=3.6146;

d_opprof_gen=.17*d_sal_gen - labor_requirement*d_wage_gen - .36118*(1/5)*d_rent_gen;

d_opprof_groc=.17*d_sal_groc - labor_requirement*d_wage_groc - .36118*(1/5)*d_rent_groc;

weight_factor=1/(.95**(year_open1-1962));

d_opprof=d_opprof_gen+d_opprof_groc;

d_lnneig5=d_lnneig5_gen+d_lnneig5_groc;

d_lnneig5_2=d_lnneig5_2_gen+d_lnneig5_2_groc;

d_dc_dist=d_dc_gen_dist+d_dc_groc_dist;

Note the weight factor is used to convert present value to the year as of the earliest opening of the pair of stores.