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The retail revolution and food-price mismeasurement

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  • Leonard I. Nakamura

Abstract

If a product sells for $3 this week at the local supermarket and $2 next week, what is the \\"real\\" price? What if that same product has a different price at a different store? Thanks to scanner technology, food prices differ a lot these days because they can be changed quickly and easily. How do our official statistics take these price movements into account? Not too well, according to Leonard Nakamura. In this article, he describes the retail revolution of recent years and how it has led to mismeasurement of food prices

Suggested Citation

  • Leonard I. Nakamura, 1998. "The retail revolution and food-price mismeasurement," Business Review, Federal Reserve Bank of Philadelphia, issue May, pages 3-14.
    • Handle: RePEc:fip:fedpbr:y:1998:i:may:p:3-14
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    File URL: https://www.philadelphiafed.org/-/media/frbp/assets/economy/articles/business-review/1998/may-june/brmj98ln.pdf
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    References listed on IDEAS

    as
    1. Bliss, Christopher, 1988. "A Theory of Retail Pricing," Journal of Industrial Economics, Wiley Blackwell, vol. 36(4), pages 375-391, June.
    2. Brent R. Moulton, 1996. "Bias in the Consumer Price Index: What Is the Evidence?," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 159-177, Fall.
    3. Levy, Daniel & Bergen, Mark & Dutta, Shantanu & Venable, Robert, 1997. "The Magnitude of Menu Costs: Direct Evidence from Large U.S. Supermarket Chains," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 112(3), pages 791-824.
    4. Marshall Reinsdorf, 1993. "The Effect of Outlet Price Differentials on the US Consumer Price Index," NBER Chapters, in: Price Measurements and Their Uses, pages 227-258, National Bureau of Economic Research, Inc.
    5. Leonard I. Nakamura, 1999. "The measurement of retail output and the retail revolution," Canadian Journal of Economics, Canadian Economics Association, vol. 32(2), pages 408-425, April.
    6. Leonard I. Nakamura, 1995. "Measuring inflation in a high-tech age," Business Review, Federal Reserve Bank of Philadelphia, issue Nov, pages 13-25.
    7. MacDonald, James M., 1995. "Consumer Price Index Overstates Food-Price Inflation," Food Review/ National Food Review, United States Department of Agriculture, Economic Research Service, vol. 18(3), September.
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    Cited by:

    1. John G. Fernald & Shanthi Ramnath, 2004. "The acceleration in U.S. total productivity after 1995: the role of information technology," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 28(Q I), pages 52-67.
    2. Christian Rojas & Alexandra Andino & Wayne D. Purcell, 2008. "Retailers' response to wholesale price changes: new evidence from scanner-based quantity-weighted beef prices," Agribusiness, John Wiley & Sons, Ltd., vol. 24(1), pages 1-15.

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    Keywords

    Food prices; Consumer price indexes;

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