Abstract
Abstract Food banks play a critical part in the food distribution system. In this paper, we examine the impact of food bank donations on retailer markups using data on donations and store-level productivity. We frame our empirical model of food bank donations and store-level markups as an example of quality-based price discrimination and find that stores that donate more food to the local food bank are able to charge higher markups—33% higher—after controlling for the well-known endogeneity problems. Our findings suggest that donations are not just charitable gestures by retailers but are in their own self-interests.
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