Market Structure, Inflation, and Price Dispersion
AbstractIn this paper, we investigate the impact of market structure on the relationship between inflation and price dispersion. We first propose a new empirical model of the relationship between inflation and dispersion with firmer theoretical foundations, and then extend the basic model to incorporate the potential effects of market structure. We estimate the basic and market structure specifications using a unique micro-level data set from Istanbul, which consists of monthly price observations from three different store types: convenience stores, open-air markets, and supermarkets. Our empirical findings support almost all of the basic and market structure predictions.
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Bibliographic InfoPaper provided by Department of Economics, University of Leicester in its series Discussion Papers in Economics with number 04/2.
Date of creation: Feb 2004
Date of revision: Jun 2004
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Postal: Department of Economics University of Leicester, University Road. Leicester. LE1 7RH. UK
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Other versions of this item:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-02-23 (All new papers)
- NEP-MAC-2004-02-23 (Macroeconomics)
- NEP-MIC-2004-02-23 (Microeconomics)
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