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Rigid prices: evidence from U.S. scanner data

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  • Jeffrey R. Campbell
  • Benjamin Eden

Abstract

This paper uses over two years of weekly scanner data from two small US cities to characterize time and state dependence of grocers' pricing decisions. In these data, the probability of a nominal adjustment declines with the time since the last price change. This reflects differences over time in the flexibility of prices charged by a single store for a given good. We also detect state dependence: The probability of a nominal adjustment is highest when a store's price substantially differs from the average of other stores. However, extreme prices typically reflect the selling store's recent nominal adjustments rather than changes in other stores' prices.

Suggested Citation

  • Jeffrey R. Campbell & Benjamin Eden, 2005. "Rigid prices: evidence from U.S. scanner data," Working Paper Series WP-05-08, Federal Reserve Bank of Chicago.
    • Handle: RePEc:fip:fedhwp:wp-05-08
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    More about this item

    Keywords

    Prices;

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General

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