Do psychological prices contribute to price rigidity? Evidence from German scanner data on food brands
A substantial degree of price rigidity has been reported for branded foods in various studies with scanner data. One possible explanation for price rigidity is the existence of psychological pricing points. The authors analyze to what extent psychological pricing plays a role in grocery retailing and whether it contributes to the price rigidity of branded foods in Germany. Psychological pricing-defined here as just-below-the-round-figure-pricing-is empirically analyzed with scanner data of weekly prices for 20 food brands in 38 retail outlets from September 1996 to June 1999. Psychological pricing turned out to be extremely important in German food retailing. Branded food prices are remarkably sticky and psychological pricing points contribute strongly to price rigidity. Other factors like the sales phenomenon and firm-specific effects are additionally important. [EconLit Classifications: Q110, Q130]. © 2006 Wiley Periodicals, Inc. Agribusiness 22: 51-67, 2006.
Volume (Year): 22 (2006)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Anil K. Kashyap, 1990.
"Sticky prices: new evidence from retail catalogs,"
Finance and Economics Discussion Series
112, Board of Governors of the Federal Reserve System (U.S.).
- Anil K Kashyap, 1994. "Sticky Prices: New Evidence from Retail Catalogs," NBER Working Papers 4855, National Bureau of Economic Research, Inc.
- Anil K. Kashyap, 1991. "Sticky prices: new evidence from retail catalogs," Working Paper Series, Macroeconomic Issues 91-26, Federal Reserve Bank of Chicago.
- Schindler, Robert M & Kirby, Patrick N, 1997. " Patterns of Rightmost Digits Used in Advertised Prices: Implications for Nine-Ending Effects," Journal of Consumer Research, Oxford University Press, vol. 24(2), pages 192-201, September.
- Daniel Hosken & David Reiffen, 2001. "Multiproduct retailers and the sale phenomenon," Agribusiness, John Wiley & Sons, Ltd., vol. 17(1), pages 115-137.
- Herrmann, Roland & Moser, Anke, 2003.
"Price Variability Or Rigidity In The Food-Retailing Sector? Theoretical Analysis And Evidence From German Scanner Data,"
2003 Annual Meeting, August 16-22, 2003, Durban, South Africa
25867, International Association of Agricultural Economists.
- Herrmann, Roland & Möser, Anke, 2003. "Price variability or rigidity in the food-retailing sector? Theoretical analysis and evidence from German scanner data," Discussion Papers 11, Justus Liebig University Giessen, Center for international Development and Environmental Research (ZEU).
- Carlton, Dennis W, 1986.
"The Rigidity of Prices,"
American Economic Review,
American Economic Association, vol. 76(4), pages 637-658, September.
- Elizabeth Powers & Nicholas Powers, 2001. "The Size and Frequency of Price Changes: Evidence from Grocery Stores," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 18(4), pages 397-416, June.
When requesting a correction, please mention this item's handle: RePEc:wly:agribz:v:22:y:2006:i:1:p:51-67. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.