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arXiv · 2201.07903

Identification of Direct Socio-Geographical Price Discrimination: An Empirical Study on iPhones

Davidson Cheng
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Abstract

Price discrimination is a practice where firms utilize varying sensitivities to prices among consumers to increase profits. The welfare effects of price discrimination are not agreed on among economists, but identification of such actions may contribute to our standing of firms' pricing behaviors. In this letter, I use econometric tools to analyze whether Apple Inc, one of the largest companies in the globe, is practicing price discrimination on the basis of socio-economical and geographical factors. My results indicate that iPhones are significantly (p $<$ 0.01) more expensive in markets where competitions are weak or where Apple has a strong market presence. Furthermore, iPhone prices are likely to increase (p $<$ 0.01) in developing countries/regions or markets with high income inequality.

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Davidson Cheng. 2022-01-19. Identification of Direct Socio-Geographical Price Discrimination: An Empirical Study on iPhones. https://arxiv.org/abs/2201.07903

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