This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Price-Adjustment Costs and Adjustment Frequency: An Analysis with Individual Data

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Fernando Merino (Universidad de Alcala)

Additional information is available for the following registered author(s):

Abstract

Different models have stressed the importance of the costs of price-adjustment given that its existence justifies the possibility of some real effects caused by changes in nominal variables. This paper is focused on the evaluation of these costs from a microeconomic perspective. Using a database of Spanish manufacturing firms, the relationship between the frequency of price adjustment and the price diffusion mechanism (and then, the adjustment-cost) in analysed, taking into consideration other control variables as the figure and sign of the price variation, or the position in the market. The nature of the dependent variable (discrete) and the upper censorship in the database (all those firms which change the price more than three times during the year have the same indicator) makes necessary the use of some non-usual econometric techniques, such as ordered probit, and censored discrete dependent variables models. The results show an asymmetric behaviour for positive and negative price variations, as well as the fact that firms which will incur in monetary costs to adjust its price (because they announce them by catalogues or similar methods) will do it less frequently, with the figure of the price variation controlled. Besides, the results allow a comparison of the different econometric techniques to estimate models with discrete dependent variables.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. 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.

File URL: http://fmwww.bc.edu/RePEc/es2000/1712.pdf
File Format: application/pdf
File Function: main text
Download Restriction: no

Publisher Info
Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 1712.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: 01 Aug 2000
Date of revision:
Handle: RePEc:ecm:wc2000:1712

Contact details of provider:
Phone: 1 212 998 3820
Fax: 1 212 995 4487
Email:
Web page: http://www.econometricsociety.org/pastmeetings.asp
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords:

References listed on IDEAS
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.:

  1. Hercowitz, Zvi, 1981. "Money and the Dispersion of Relative Prices," Journal of Political Economy, University of Chicago Press, vol. 89(2), pages 328-56, April. [Downloadable!] (restricted)
    Other versions:
  2. Tommasi, Mariano, 1994. "The Consequences of Price Instability on Search Markets: Toward Understanding the Effects of Inflation," American Economic Review, American Economic Association, vol. 84(5), pages 1385-96, December. [Downloadable!] (restricted)
  3. Walsh, Patrick Paul & Whelan, Ciara, 1999. "Modelling Price Dispersion as an Outcome of Competition in the Irish Grocery Market," Journal of Industrial Economics, Blackwell Publishing, vol. 47(3), pages 325-43, September. [Downloadable!] (restricted)
  4. Jerry A. Hausman & Bronwyn H. Hall & Zvi Griliches, 1984. "Econometric Models for Count Data with an Application to the Patents-R&D Relationship," NBER Technical Working Papers 0017, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Domberger, Simon, 1987. "Relative Price Variability and Inflation: A Disaggregated Analysis," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 547-66, June. [Downloadable!] (restricted)
  6. Slade, Margaret E, 1998. "Optimal Pricing with Costly Adjustment: Evidence from Retail-Grocery Prices," Review of Economic Studies, Blackwell Publishing, vol. 65(1), pages 87-107, January. [Downloadable!] (restricted)
    Other versions:
  7. David Romer., 1989. "Staggered Price Setting with Endogenous Frequency of Adjustment," Economics Working Papers 89-115, University of California at Berkeley.
    Other versions:
  8. Sheshinski, Eytan & Weiss, Yoram, 1977. "Inflation and Costs of Price Adjustment," Review of Economic Studies, Blackwell Publishing, vol. 44(2), pages 287-303, June. [Downloadable!] (restricted)
  9. Asplund, Marcus & Eriksson, Rickard & Friberg, Richard, 1997. "Price adjustments by a gasoline retail chain," Working Paper Series in Economics and Finance 194, Stockholm School of Economics. [Downloadable!]
    Other versions:
  10. Terza, Joseph V., 1985. "A Tobit-type estimator for the censored Poisson regression model," Economics Letters, Elsevier, vol. 18(4), pages 361-365. [Downloadable!] (restricted)
  11. Cecchetti, Stephen G., 1986. "The frequency of price adjustment : A study of the newsstand prices of magazines," Journal of Econometrics, Elsevier, vol. 31(3), pages 255-274, April. [Downloadable!] (restricted)
  12. Danziger, Leif, 1983. "Price Adjustments with Stochastic Inflation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(3), pages 699-707, October. [Downloadable!] (restricted)
  13. Daniel Levy & Mark Bergen & Shantanu Dutta & Robert Venable, 2005. "The Magnitude of Menu Costs: Direct Evidence from Large U.S. Supermarket Chains," Macroeconomics 0505012, EconWPA. [Downloadable!]
    Other versions:
  14. Mussa, Michael, 1981. "Sticky Prices and Disequilibrium Adjustment in a Rational Model of the Inflationary Process," American Economic Review, American Economic Association, vol. 71(5), pages 1020-27, December. [Downloadable!] (restricted)
  15. Bondonio, Daniele, 2002. "Evaluating the Employment Impact of Business Incentive Programs in EU Disadvantaged Areas. A case from Northern Italy," P.O.L.I.S. department's Working Papers 27, Department of Public Policy and Public Choice - POLIS. [Downloadable!]
  16. Domberger, Simon & Fiebig, Denzil G, 1993. "The Distribution of Price Changes in Oligopoly," Journal of Industrial Economics, Blackwell Publishing, vol. 41(3), pages 295-313, September. [Downloadable!] (restricted)
  17. Cameron, A. Colin & Trivedi, Pravin K., 1990. "Regression-based tests for overdispersion in the Poisson model," Journal of Econometrics, Elsevier, vol. 46(3), pages 347-364, December. [Downloadable!] (restricted)
  18. Sheshinski, Eytan & Weiss, Yoram, 1983. "Optimum Pricing Policy under Stochastic Inflation," Review of Economic Studies, Blackwell Publishing, vol. 50(3), pages 513-29, July. [Downloadable!] (restricted)
  19. Van Hoomissen, Theresa, 1988. "Price Dispersion and Inflation: Evidence from Israel," Journal of Political Economy, University of Chicago Press, vol. 96(6), pages 1303-14, December. [Downloadable!] (restricted)
  20. Hollander, Abraham, 1994. "Noise: A firm-made trade barrier," European Economic Review, Elsevier, vol. 38(1), pages 133-141, January. [Downloadable!] (restricted)
  21. Kuran, Timur, 1983. "Asymmetric Price Rigidity and Inflationary Bias," American Economic Review, American Economic Association, vol. 73(3), pages 373-82, June. [Downloadable!] (restricted)
Full references

Statistics
Access and download statistics

Did you know? IDEAS also indexes books.

This page was last updated on 2009-12-2.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.