Effects of the Sunday shopping restriction in Korea

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 J7%-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)
I. INTRODUCTION The Korean government implemented a Sunday shopping regulation in 2012. This restriction is unique in its purpose and implementation; while most other countries have enforced Sunday shopping regulations [...]