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Why Does the Average Price of Tuna Fall During Lent?

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  • Aviv Nevo
  • Konstantinos Hatzitaskos

Abstract

For many products the average price paid by consumers falls during periods of high demand. We use information from a large supermarket chain to decompose the decrease in the average price into a substitution effect, due to an increase in the share of cheaper products, and a price reduction effect. We find that for almost all the products we study the substitution effect explains a large part of the decrease. We estimate demand for these products and show the price declines are consistent with a change in demand elasticity and the relative demand for different brands. Our findings are less consistent with "loss-leader" models of retail competition.

Suggested Citation

  • Aviv Nevo & Konstantinos Hatzitaskos, 2005. "Why Does the Average Price of Tuna Fall During Lent?," NBER Working Papers 11572, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:11572
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Why Does Turkey Get Cheaper Around Thanksgiving?
      by Matthew Yglesias in Moneybox on 2012-11-21 21:07:00

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    Cited by:

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    2. Dong, Xiao, 2023. "Does seasonal product rotation contribute to countercyclical pricing and cheaper turkeys during Thanksgiving, Christmas, and Easter?," Economics Letters, Elsevier, vol. 225(C).
    3. Pinelopi Koujianou Goldberg & Rebecca Hellerstein, 2013. "A Structural Approach to Identifying the Sources of Local Currency Price Stability," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(1), pages 175-210.
    4. David Genesove & Avi Simhon, 2015. "Seasonality and the Effect of Advertising on Price," Journal of Industrial Economics, Wiley Blackwell, vol. 63(1), pages 199-222, March.
    5. Guler, Ali Umut & Misra, Kanishka & Vilcassim, Naufel, 2014. "Countercyclical pricing: A consumer heterogeneity explanation," Economics Letters, Elsevier, vol. 122(2), pages 343-347.
    6. Saul Lach, 2007. "Immigration and Prices," Journal of Political Economy, University of Chicago Press, vol. 115(4), pages 548-587, August.
    7. Justine Hastings & Ebonya Washington, 2010. "The First of the Month Effect: Consumer Behavior and Store Responses," NBER Chapters, in: Income Taxation, Trans-Atlantic Public Economics Seminar (TAPES), pages 142-162, National Bureau of Economic Research, Inc.
    8. Orbach, Barak Y. & Einav, Liran, 2007. "Uniform prices for differentiated goods: The case of the movie-theater industry," International Review of Law and Economics, Elsevier, vol. 27(2), pages 129-153.
    9. Judith A. Chevalier & Anil K. Kashyap, 2011. "Best Prices," NBER Working Papers 16680, National Bureau of Economic Research, Inc.
    10. Federico Echenique & Sangmok Lee & Matthew Shum, 2011. "The Money Pump as a Measure of Revealed Preference Violations," Journal of Political Economy, University of Chicago Press, vol. 119(6), pages 1201-1223.

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