Markups across Space and Time

In this paper, we provide direct evidence on the behavior of retail-sector gross margins across space and time. We consider three levels of aggregation: the retail sector as a whole, ?rm-level data, and product-level data. We ?nd that: (1) gross margins are relatively stable over time and mildly procyclical; (2) there is large regional dispersion in gross margins; (3) there is a positive cross-sectional correlation between local income and local gross margins; and (4) di?erences in gross margins across regions are explained by di?erences in assortment, not by deviations from uniform pricing.