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If You Think 9-Ending Prices Are Low, Think Again

Author

Listed:
  • Avichai Snir
  • Daniel Levy

Abstract

The 9-ending prices, which comprise between 40% and 95% of retail prices, are popular because shoppers perceive them as being low. We study whether this belief is justified using scanner price-data with more than 98-million observations from a large US grocery chain. We find that 9-ending prices are higher than non-9-ending prices, by as much as 18%. Two factors explain why shoppers believe, mistakenly, that 9-ending prices are low. First, we find that among sale prices, 9-ending prices are indeed lower than non-9-ending prices, giving 9-ending prices an aura of being low. Second, 9-ending prices were indeed lower than other prices. Shoppers therefore learned to associate 9-endings with low prices. Over time, however, 9-ending prices rose substantially, which shoppers failed to notice, because the continuous use of 9-ending prices for promoting deep price cuts draws shoppers’ attention to them and helps to maintain and preserve the image of 9-ending prices as bargain prices.

Suggested Citation

  • Avichai Snir & Daniel Levy, 2021. "If You Think 9-Ending Prices Are Low, Think Again," Journal of the Association for Consumer Research, University of Chicago Press, vol. 6(1), pages 33-47.
    • Handle: RePEc:ucp:jacres:doi:10.1086/710241
    DOI: 10.1086/710241
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    Citations

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    Cited by:

    1. Snir, Avichai & Chen, Haipeng (Allan) & Levy, Daniel, 2022. "Zero-Ending Prices, Cognitive Convenience, and Price Rigidity," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 203, pages 519-542.
    2. repec:rim:rimwps:23-10 is not listed on IDEAS
    3. Ray, Sourav & Snir, Avichai & Levy, Daniel, 2023. "Retail Pricing Format and Rigidity of Regular Prices," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 1-1.
    4. Snir, Avichai & Chen, Haipeng (Allan) & Levy, Daniel, 2021. "Stuck at Zero: Price Rigidity in a Runaway Inflation," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue forthcomi.
    5. Doron Sayag & Avichai Snir & Daniel Levy, 2012. "0.001% and Counting: Revisiting the Price Rounding Tax," Post-Print hal-05349980, HAL.
    6. Gonçalves, Mariana Gaspar & Barbosa, Belem & Saura, Jose Ramon & Mariani, Marcello, 2025. "Exploring the role of product attributes in 9-ending pricing strategies: A study on online retailing," Journal of Business Research, Elsevier, vol. 192(C).
    7. Levy, Daniel & Chen, Haipeng (Allan) & Ray, Sourav & Charette, Elliot & Ling, Xiao & Zhao, Weihong & Bergen, Mark & Snir, Avichai, 2025. "Asymmetric price adjustment over the business cycle," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 0, pages 112450-1124.
    8. Levy, Daniel & Snir, Avichai, 2022. "Potterian Economics," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 1, pages 1-32.

    More about this item

    JEL classification:

    • M30 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - General
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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