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Abstract:
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Estimating retail store revenues in developing nations is difficult when information is limited and available data is of questionable quality. Most estimates will be extrapolated from available samples, but the sampling may be based on convenience and so include measurement and selection biases. Government collected data can validate convenience sample estimates, but often such data are limited or infrequently provided. This paper investigates whether empirical regularities described by power laws can be used for validation. Several papers have investigated power law relationships in areas related to firm size and growth (Axtell, 2001; Luttmer 2007), market share (Riemer, et. al, 2002), and for specific types of businesses (Goddard et. al., 2014). This paper posits that store size, sales, and revenues are follow power law rules in that they share under-girding principles that are consistent across markets. Investigation of the applicability of Power Laws to retail markets will address whether reliance on these empirical "laws" can serve as a validation technique for Nielsen's audit / sampling of grocery and drug stores in developing nations.
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