Effects of the Sunday shopping regulation on households' food consumption: application of an almost ideal demand model

The South Korean government has been implementing a Sunday shopping regulation since 2012 to protect traditional and small- and medium-sized markets. Under this regulation, large supermarkets are mandated to close for two days each month, mostly on the second and fourth Sundays. This paper analyzes the effect of Sunday shopping regulation by building on the demand system of consumers. Specifically, this study builds on the Linear Approximate Almost Ideal Demand System (LAAIDS) model and estimates the weekly expenditure share of households by market type, using unique household-level panel data from the Agri-Food Consumer Panel Survey of the Rural Development Administration. Our results show that the household expenditure share for large supermarkets decreases by 3.5%p to 4.0%p during regulation weeks. Part of the decreased expenditure share shifts to small- and medium-sized markets but not to traditional markets. We also find there is a growing trend for household expenditure to shift to online over the sample period.