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Intertemporal Substitution and Storable Products

Author

Listed:
  • Igal Hendel

    (University of Wisconsin, Madison and NBER,)

  • Aviv Nevo

    (University of California, Berkeley and NBER,)

Abstract

Storable products allow consumers to time their purchases to exploit price fluctuations. It has been documented that during promotions consumers buy more. The additional purchases are potentially intended not only for current use, but to be stockpiled for future consumption. This paper discusses the predictions of a consumer inventory model and reviews the available evidence. We then discuss the implications for demand estimation and present estimates of the economic magnitude of the dynamic effect of storability. (JEL: L0, L4, D1, D4) Copyright (c) 2004 The European Economic Association.

Suggested Citation

  • Igal Hendel & Aviv Nevo, 2004. "Intertemporal Substitution and Storable Products," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 536-547, 04/05.
  • Handle: RePEc:tpr:jeurec:v:2:y:2004:i:2-3:p:536-547
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    Citations

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    Cited by:

    1. Victor Aguirregabiria & Victor Aguirregabiria & Aviv Nevo & Aviv Nevo, 2010. "Recent Developments in Empirical IO: Dynamic Demand and Dynamic Games," Working Papers tecipa-419, University of Toronto, Department of Economics.
    2. Pozzi, Andrea, 2013. "E-commerce as a stockpiling technology: Implications for consumer savings," International Journal of Industrial Organization, Elsevier, vol. 31(6), pages 677-689.
    3. Nikolaus Fink, 2016. "Formation and Adaptation of the Sugar Cartel in Austria–Hungary," WIFO Working Papers 508, WIFO.
    4. Anily, Shoshana & Hassin, Refael, 2013. "Pricing, replenishment, and timing of selling in a market with heterogeneous customers," International Journal of Production Economics, Elsevier, vol. 145(2), pages 672-682.
    5. David CASHIN & UNAYAMA Takashi, 2011. "The Intertemporal Substitution and Income Effects of a VAT Rate Increase: Evidence from Japan," Discussion papers 11045, Research Institute of Economy, Trade and Industry (RIETI).
    6. V. Kerry Smith & Sharon L. Harlan & Michael McLaen & Jacob Fishman & Carlos Valcarcel & Marcia Nation, 2015. "Compassion or Cash: Evaluating Survey Response Incentives and Valuing Public Goods," NBER Working Papers 21288, National Bureau of Economic Research, Inc.
    7. Stefano DellaVigna & Ulrike Malmendier, 2006. "Paying Not to Go to the Gym," American Economic Review, American Economic Association, vol. 96(3), pages 694-719, June.
    8. Antoniou, Fabio & Fiocco, Raffaele, 2017. "Strategic inventories under limited commitment," Working Papers 2072/306512, Universitat Rovira i Virgili, Department of Economics.
    9. David B. Cashin, 2017. "The Household Expenditure Response to a Consumption Tax Rate Increase," Finance and Economics Discussion Series 2017-035, Board of Governors of the Federal Reserve System (U.S.).

    More about this item

    JEL classification:

    • L0 - Industrial Organization - - General
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • D1 - Microeconomics - - Household Behavior
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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