August 14, 2020 / 3:10 PM / FDC / Header Image Credit: FDC Limited
Pay More & Get Less, the Lagos Consumer Paradox
If you live in Victoria Island, Ikoyi or Lekki, you are probably paying 20% more for a basket of tomatoes than your friend who lives on the Mainland. This does not just apply to open markets like Sura & Oyingbo, but also the supermarkets. In a recent survey with Channels TV media group, we sought to examine the degree of price discrimination across various markets (open & supermarkets) in the Lagos metropolis. Interestingly, we found that location and transport costs are the major drivers of the price variation.
Price Discrimination Vs Price Gouging
Price gouging is an extreme case of price discrimination where the consumer finds the price of a commodity unbearable and unfair. It is a characteristic of extreme situations of market imperfection. Luckily, gouging or cutthroat pricing is not that prevalent in Lagos. This is because the use of mobile phones and electronic payment makes exploitation of information asymmetry very difficult. As the barriers to entry get lower, consumer exploitation is going to reduce.
In the slides below, you will see the results of a joint market survey between the FDC Think Tank and Channels TV Media Group.