IKEA: Product, Pricing, and Exchange Rate Pass-through

SPRING 2017 RESEARCH INCUBATION AWARDEES 

PI: Marianne Baxter, Economics, CAS
Co-PI: Margrit Betke, Computer Science, CAS

The project seeks to use detailed catalog information on products and page layout to advance an understanding of the decision-making process of IKEA – the world’s largest furniture retailer, with stores in 41 countries and annual revenue estimated at $24 billion. The project will achieve this aim through two components: (1) Construct a new data set of IKEA product specifications and prices from catalogs from 1988-2004 in seven countries: US; Canada; France, Germany, Italy, UK, and Sweden for the purpose of understanding IKEA’s process of product creation and international coordination of price setting. These data will be linked with an existing data set covering 2005-2014, providing a lens to IKEA’s response to the introduction of the Euro and the global Great Recession; and (2) Analyze the visual layout of the IKEA catalogs to detect cultural/national differences in visual and text-based product presentation.

This work is funded by a Hariri Research Award made in January, 2017.