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Private label price rigidity during holiday periods

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Author Info

  • Georg Muller
  • Mark Bergen
  • Shantanu Dutta
  • Daniel Levy

Abstract

Using weekly retail transaction scanner price data from a large US supermarket chain, significantly higher retail price rigidity is found for private label products than for nationally branded products during the Christmas and Thanksgiving holiday periods relative to the rest of the year. The finding cannot be explained by changes in holiday period promotional practices because it is found that private label promotions appear to diminish at least as much as national brands. The increased rigidity of private label products relative to national brands is only partially accounted for by increased rigidity of wholesale prices. After ruling out other potential explanations, it is suggested that the higher private label price rigidity might be due to the increased emphasis on social consumption during holiday periods, raising the customers' value of nationally branded products relative to the private labels.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics Letters.

Volume (Year): 13 (2006)
Issue (Month): 1 ()
Pages: 57-62

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Handle: RePEc:taf:apeclt:v:13:y:2006:i:1:p:57-62

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References

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  1. Warner, Elizabeth J & Barsky, Robert B, 1995. "The Timing and Magnitude of Retail Store Markdowns: Evidence from Weekends and Holidays," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 321-52, May.
  2. Shantanu Dutta & Mark Bergen & Daniel Levy, 2004. "Price Flexibility in Channels of Distribution: Evidence from Scanner Data," Macroeconomics 0402018, EconWPA.
  3. Daniel Levy & Georg Muller & Shantanu Dutta & Mark Bergen, 2002. "Holiday Price Rigidity and Cost of Price Adjustment," Emory Economics 0208, Department of Economics, Emory University (Atlanta).
  4. Julio J. Rotemberg, 2002. "Customer Anger at Price Increases, Time Variation in the Frequency of Price Changes and Monetary Policy," NBER Working Papers 9320, National Bureau of Economic Research, Inc.
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  6. Daniel Levy & Shantanu Dutta & Mark Bergen, 2002. "Heterogeneity in Price Rigidity: Evidence from a Case Study Using Micro-Level Data," Working Papers 2002-09, Department of Economics, Bar-Ilan University.
  7. Dennis W. Carlton, 1987. "The Rigidity of Prices," NBER Working Papers 1813, National Bureau of Economic Research, Inc.
  8. Robert Barsky & Mark Bergen & Shantanu Dutta & Daniel Levy, 2002. "What Can the Price Gap between Branded and Private Label Products Tell Us about Markups?," Working Papers 2002-02, Department of Economics, Bar-Ilan University.
  9. Robert C. Feenstra & Matthew D. Shapiro, 2003. "Scanner Data and Price Indexes," NBER Books, National Bureau of Economic Research, Inc, number feen03-1.
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  12. Mark J. Zbaracki & Mark Ritson & Daniel Levy & Shantanu Dutta & Mark Bergen, 2004. "Managerial and Customer Costs of Price Adjustment: Direct Evidence from Industrial Markets," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 514-533, May.
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  17. Otnes, Cele & Lowrey, Tina M & Kim, Young Chan, 1993. " Gift Selection for Easy and Difficult Recipients: A Social Roles Interpretation," Journal of Consumer Research, University of Chicago Press, vol. 20(2), pages 229-44, September.
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Citations

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Cited by:
  1. Daniel Levy & Georg Muller & Shantanu Dutta & Mark Bergen, 2004. "Holiday Price Rigidity and Cost of Price Adjustment," Macroeconomics 0402019, EconWPA, revised 10 Jun 2005.
  2. Levy, Daniel, 2007. "Price Rigidity and Flexibility: New Empirical Evidence," MPRA Paper 2762, University Library of Munich, Germany.
  3. Georg Muller & Mark Bergen & Shantanu Dutta & Daniel Levy, 2006. "Holiday Non-Price Rigidity and Cost of Adjustment," Working Papers 2006-4, Department of Economics, Bar-Ilan University.
  4. Georg Müller & Mark Bergen & Shantanu Dutta & Daniel Levy, 2007. "Non-price rigidity and cost of adjustment," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 817-832.

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