Abstract
We examine the effectiveness of Korea's Sunday superstore shopping regulation, whose purpose is to protect small- and medium-sized retailers as well as traditional markets. Applying a two-way random-effects regression model to the daily sales data of four megastores and four super supermarkets, we find the net sales decrease of superstores is on average 5.61% of daily sales after taking into account sales increases due to consumers' switching to weekdays. Only about 17%–19% of the reduced superstore sales are transferred to traditional markets. Based on these estimates, the compensating variation per year is predicted to be 2.4–2.5 trillion Korean won (around US $2.1–2.2 billion). (JEL L51, L88)
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