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Macroeconomic Implications of Uniform Pricing

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  • Diego Daruich
  • Julian Kozlowski

Abstract

We compile a new database of grocery prices in Argentina. We find uniform pricing both within and across regions—i.e., prices almost do not vary within the stores of a chain. In line with uniform pricing, prices in stores of chains operating in one region react to changes in regional employment while prices in multiregion chains do not. Using a quantitative regional model with multiregion firms and uniform pricing, we find a one-half smaller elasticity of prices to a regional than an aggregate shock. This result highlights that some caution may be necessary when using regional shocks to estimate aggregate elasticities.

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  • Diego Daruich & Julian Kozlowski, 2023. "Macroeconomic Implications of Uniform Pricing," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(3), pages 64-108, July.
    • Handle: RePEc:aea:aejmac:v:15:y:2023:i:3:p:64-108
    DOI: 10.1257/mac.20210172
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    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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