Sales and Consumer Inventory
AbstractTemporary price reductions (sales) are common for many goods and naturally result in a large increase in the quantity sold. We explore whether the data support the hypothesis that these increases are, at least partly, due to demand anticipation: at low prices, consumers store for future consumption. This effect, if present, has broad economic implications. We test the predictions of an inventory model using scanner data with two years of household purchases. The results are consistent with an inventory model and suggest that static demand estimates may overestimate price sensitivity. Ordering information: This article can be ordered from http://gemini.econ.umd.edu/cgi-bin/rje_online.cgi?action=buy&year=2006&issue=aut&page=543&tid=30492&sc=1869P1N9 .
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Bibliographic InfoArticle provided by The RAND Corporation in its journal RAND Journal of Economics.
Volume (Year): 37 (2006)
Issue (Month): 3 (Autumn)
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Web page: http://www.rje.org
Other versions of this item:
- Igal Hendel & Aviv Nevo, 2002. "Sales and Consumer Inventory," NBER Working Papers 9048, National Bureau of Economic Research, Inc.
- Iga Hendel and Aviv Nevo., 2001. "Sales and Consumer Inventory," Economics Working Papers E01-307, University of California at Berkeley.
- Hendel, Igal & Nevo, Aviv, 2001. "Sales and Consumer Inventory," Department of Economics, Working Paper Series qt11x3d68b, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Iga Hendel & Aviv Nevo, 2002. "Sales and Consumer Inventory," Microeconomics 0201001, EconWPA.
- Hendel, Igal & Nevo, Aviv, 2001. "Sales and Consumer Inventory," Competition Policy Center, Working Paper Series qt0p18h2d8, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
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