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Restaurant Prices And The Minimum Wage

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Author Info
Fougere, Denis
Gautier, Erwan
Le Bihan, Herve

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Abstract

We examine the effect of the minimum wage on restaurant prices. For that purpose, we estimate a price rigidity model by exploiting a unique data set of individual price quotes used to calculate the Consumer Price Index in France. We  find a positive and signifi cant impact of the minimum wage on prices. We obtain that the effect of the minimum wage on prices is very protracted. The aggregate impact estimated with our model takes more than a year to fully pass through to retail prices.

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Paper provided by American Association of Wine Economists in its series Working Papers with number 44084.

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Date of creation: Oct 2008
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Handle: RePEc:ags:aawewp:44084

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Web page: http://www.wine-economics.org
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Related research
Keywords: Price stickiness; minimum wage; inflation; restaurant prices; Demand and Price Analysis; Industrial Organization;

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  20. Yannick L'horty & Christophe Rault, 2004. "Inflation, minimum wage and other wages: an econometric study on French macroeconomic data," Applied Economics, Taylor and Francis Journals, vol. 36(4), pages 277-290, March. [Downloadable!] (restricted)
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  31. Emmanuel Dhyne & Luis J. Álvarez & Hervé Le Bihan & Giovanni Veronese & Daniel Dias & Johannes Hoffmann & Nicole Jonker & Patrick Lünnemann & Fabio Rumler & Jouko Vilmunen, 2005. "Price setting in the euro area: Some stylized facts from Individual Consumer Price Data," Research series 200509-2, National Bank of Belgium. [Downloadable!]
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  32. Marvin Goodfriend & Robert King, 1997. "The New Neoclassical Synthesis and the Role of Monetary Policy," NBER Chapters, in: NBER Macroeconomics Annual 1997, Volume 12, pages 231-296 National Bureau of Economic Research, Inc. [Downloadable!]
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