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Restaurant Prices and the Minimum Wage

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  • Denis FOUGERE

    (Crest)

  • Erwan GAUTIER

    (Crest)

  • Hervé LE BIHAN

    (Crest)

Abstract

In this paper, we examine the e¤ect of the minimum wage on restaurant prices.We contributeboth to the study of economic impact of the minimum wage and to the study of microeconomicpatterns of price stickiness. For this purpose, we use a unique dataset of individual price quotescollected to calculate the Consumer Price Index in France and we estimate a price rigidity modelbased on a ?exible (S; s) rule. We ?nd a positive and signi?cant impact of the minimum wageon prices. The e¤ect of the minimum wage on prices is however very protracted. A change inthe minimum wage takes more than a year to fully pass through to retail prices.

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Paper provided by Centre de Recherche en Economie et Statistique in its series Working Papers with number 2009-13.

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Length: 55
Date of creation: 2009
Date of revision:
Handle: RePEc:crs:wpaper:2009-13

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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. 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).
  2. Erwan Gautier & Ronan Le Saout, 2012. "The Dynamics of Gasoline Prices: Evidence from Daily French Micro Data," Working Papers hal-00759095, HAL.
  3. Draca, Mirko & Machin, Stephen & Van Reenen, John, 2006. "Minimum Wages and Firm Profitability," IZA Discussion Papers 1913, Institute for the Study of Labor (IZA).
  4. Sanvi Avouyi-Dovi & Denis Fougère & Erwan Gautier, 2013. "Wage Rigidity, Collective Bargaining, and the Minimum Wage: Evidence from French Agreement Data," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1337-1351, October.
  5. Horny, G. & Sevestre, P., 2010. "Wage and price joint dynamics at the firm level: an empirical analysis," Working papers 305, Banque de France.
  6. Bo E. Honoré & Daniel Kaufmann & Sarah Lein, 2012. "Asymmetries in Price‐Setting Behavior: New Microeconometric Evidence from Switzerland," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 44, pages 211-236, December.
  7. Benassi, Chiara, 2011. "The implementation of minimum wage : challenges and creative solutions," ILO Working Papers 462988, International Labour Organization.

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