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Restaurant Prices and the Minimum Wage

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  • Fougère, Denis
  • Gautier, Erwan
  • Le Bihan, Hervé

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 dataset of individual price quotes used to calculate the Consumer Price Index in France. We find a positive and significant 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 C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6892.

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Date of creation: Jun 2008
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Handle: RePEc:cpr:ceprdp:6892

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Keywords: Inflation; Minimum wage; Price stickiness; Restaurant prices;

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  1. Minimum wages and the stickiness of restaurant prices
    by Economic Logician in Economic Logic on 2009-04-22 08:02:00
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Cited by:
  1. Gautier, Erwan & Fougère, Denis & Avouyi-Dovi, Sanvi, 2013. "Wage Rigidity, Collective Bargaining and the Minimum Wage: Evidence from French Agreement Data," Economics Papers from University Paris Dauphine 123456789/11158, Paris Dauphine University.
  2. Benassi, Chiara, 2011. "The implementation of minimum wage : challenges and creative solutions," ILO Working Papers 462988, International Labour Organization.
  3. Bo E. Honoré & Daniel Kaufmann & Sarah Marit Lein, 2012. "Asymmetries in Price-Setting Behavior: New Microeconometric Evidence from Switzerland," Working Papers 2012-09, Swiss National Bank.
  4. Gautier, E. & Le Saout, R., 2012. "The Dynamics of Gasoline Prices: Evidence from Daily French Micro Data," Working papers 375, Banque de France.
  5. Dhyne, Emmanuel & Fuss, Catherine & Pesaran, M. Hashem & Sevestre, Patrick, 2007. "Lumpy Price Adjustments: A Microeconometric Analysis," IZA Discussion Papers 2793, Institute for the Study of Labor (IZA).
  6. Horny, G. & Sevestre, P., 2010. "Wage and price joint dynamics at the firm level: an empirical analysis," Working papers 305, Banque de France.

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