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Magazine prices revisited

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Author Info
Jonathan L. Willis (Federal Reserve Bank of Kansas City, Kansas City, MO 64198, USA)

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Abstract

This paper examines price adjustment behaviour in the magazine industry. In a frequently cited study, Cecchetti (1986) constructs a reduced-form (S, s) model for firms. Cecchetti assumes that a firm's pricing rules are fixed for non-overlapping three-year intervals and estimates the model using a conditional logit specification from Chamberlain (1980). The estimates are inconsistent, however, due to the duration-dependent specification of the model. Two alternative specifications are used to obtain consistent estimation. The consistent estimates continue to provide strong evidence in favour of state-dependent pricing models, but only weak evidence on the behaviour of price adjustment costs. Copyright © 2006 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/jae.836
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File URL: http://qed.econ.queensu.ca:80/jae/2006-v21.3/
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Publisher Info
Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

Volume (Year): 21 (2006)
Issue (Month): 3 ()
Pages: 337-344
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Handle: RePEc:jae:japmet:v:21:y:2006:i:3:p:337-344

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Cecchetti, Stephen G., 1986. "The frequency of price adjustment : A study of the newsstand prices of magazines," Journal of Econometrics, Elsevier, vol. 31(3), pages 255-274, April. [Downloadable!] (restricted)
  2. Aguirregabiria, Victor, 1999. "The Dynamics of Markups and Inventories in Retailing Firms," Review of Economic Studies, Blackwell Publishing, vol. 66(2), pages 275-308, April. [Downloadable!] (restricted)
  3. Bo E. Honoré & Luojia Hu, 2004. "Estimation of Discrete Time Duration Models with Grouped Data," CAM Working Papers 2004-07, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics. [Downloadable!]
  4. Chamberlain, Gary, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Blackwell Publishing, vol. 47(1), pages 225-38, January. [Downloadable!] (restricted)
  5. Slade, Margaret E, 1998. "Optimal Pricing with Costly Adjustment: Evidence from Retail-Grocery Prices," Review of Economic Studies, Blackwell Publishing, vol. 65(1), pages 87-107, January. [Downloadable!] (restricted)
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  6. Card, David & Sullivan, Daniel G, 1988. "Measuring the Effect of Subsidized Training Programs on Movements in and out of Employment," Econometrica, Econometric Society, vol. 56(3), pages 497-530, May. [Downloadable!] (restricted)
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  7. Ball, Laurence & Romer, David, 1990. "Real Rigidities and the Non-neutrality of Money," Review of Economic Studies, Blackwell Publishing, vol. 57(2), pages 183-203, April. [Downloadable!] (restricted)
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  8. Sheshinski, Eytan & Weiss, Yoram, 1977. "Inflation and Costs of Price Adjustment," Review of Economic Studies, Blackwell Publishing, vol. 44(2), pages 287-303, June. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Fougère, D. & Gautier, E. & Le Bihan, H., 2008. "Restaurant Prices and the Minimum Wage," Documents de Travail 216, Banque de France. [Downloadable!]
    Other versions:
  2. Michael Dotsey & Robert G. King, 2005. "Implications of State Dependent-Pricing for Dynamic Macroeconomic Models," Boston University - Department of Economics - Macroeconomics Working Papers Series WP2005-002, Boston University - Department of Economics. [Downloadable!]
    Other versions:
  3. Gautier, E., 2008. "Les ajustements microéconomiques des prix : une synthèse des modèles théoriques et résultats empiriques," Documents de Travail 211, Banque de France. [Downloadable!]
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This page was last updated on 2009-12-17.

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