Do psychological prices contribute to price rigidity? Evidence from German scanner data on food brands
AbstractA substantial degree of price rigidity has been reported for branded foods in various studies with scanner data. One possible explanation for price rigidity is the existence of psychological pricing points. The authors analyze to what extent psychological pricing plays a role in grocery retailing and whether it contributes to the price rigidity of branded foods in Germany. Psychological pricing-defined here as just-below-the-round-figure-pricing-is empirically analyzed with scanner data of weekly prices for 20 food brands in 38 retail outlets from September 1996 to June 1999. Psychological pricing turned out to be extremely important in German food retailing. Branded food prices are remarkably sticky and psychological pricing points contribute strongly to price rigidity. Other factors like the sales phenomenon and firm-specific effects are additionally important. [EconLit Classifications: Q110, Q130]. © 2006 Wiley Periodicals, Inc. Agribusiness 22: 51-67, 2006.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Agribusiness.
Volume (Year): 22 (2006)
Issue (Month): 1 ()
Contact details of provider:
Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297
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.:
- Anil K. Kashyap, 1990.
"Sticky prices: new evidence from retail catalogs,"
Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.)
112, Board of Governors of the Federal Reserve System (U.S.).
- Anil K. Kashyap, 1991. "Sticky prices: new evidence from retail catalogs," Working Paper Series, Macroeconomic Issues, Federal Reserve Bank of Chicago 91-26, Federal Reserve Bank of Chicago.
- Anil K Kashyap, 1994. "Sticky Prices: New Evidence from Retail Catalogs," NBER Working Papers 4855, National Bureau of Economic Research, Inc.
- Dennis W. Carlton, 1986.
"The Rigidity of Prices,"
NBER Working Papers
1813, National Bureau of Economic Research, Inc.
- Carlton, Dennis W, 1986. "The Rigidity of Prices," American Economic Review, American Economic Association, American Economic Association, vol. 76(4), pages 637-58, September.
- Herrmann, Roland & Moser, Anke, 2003.
"Price Variability Or Rigidity In The Food-Retailing Sector? Theoretical Analysis And Evidence From German Scanner Data,"
2003 Annual Meeting, August 16-22, 2003, Durban, South Africa, International Association of Agricultural Economists
25867, International Association of Agricultural Economists.
- Herrmann, Roland & Möser, Anke, 2003. "Price variability or rigidity in the food-retailing sector? Theoretical analysis and evidence from German scanner data," Discussion Papers 11, Justus Liebig University Giessen, Center for international Development and Environmental Research (ZEU).
- Elizabeth Powers & Nicholas Powers, 2001. "The Size and Frequency of Price Changes: Evidence from Grocery Stores," Review of Industrial Organization, Springer, Springer, vol. 18(4), pages 397-416, June.
- Schindler, Robert M & Kirby, Patrick N, 1997. " Patterns of Rightmost Digits Used in Advertised Prices: Implications for Nine-Ending Effects," Journal of Consumer Research, University of Chicago Press, University of Chicago Press, vol. 24(2), pages 192-201, September.
- Daniel Hosken & David Reiffen, 2001. "Multiproduct retailers and the sale phenomenon," Agribusiness, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 17(1), pages 115-137.
- Weber, Sascha A. & Anders, Sven, 2005.
"Price Rigidity and Market Power in German Retailing,"
2005 International Congress, August 23-27, 2005, Copenhagen, Denmark, European Association of Agricultural Economists
24721, European Association of Agricultural Economists.
- Sascha A. Weber & Sven M. Anders, 2007. "Price rigidity and market power in German retailing," Managerial and Decision Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 28(7), pages 737-749.
- Weber, Sascha A. & Anders, Sven, 2007. "Price Rigidity and Market Power in German Retailing," Discussion Papers 31, Justus Liebig University Giessen, Center for international Development and Environmental Research (ZEU).
- Herrmann, Roland & Möser, Anke & Weber, Sascha A., 2009. "Grocery retailing in Germany: Situation, development and pricing strategies," Discussion Papers 41, Justus Liebig University Giessen, Center for international Development and Environmental Research (ZEU).
- Craigwell, Roland & Moore, Winston & Worrell, DeLisle, 2011. "Does Consumer Price Rigidity Exist in Barbados?," MPRA Paper 40928, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.