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Rigid Prices: Evidence From U.S. Scanner Data

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Listed:
  • Jeffrey R. Campbell
  • Benjamin Eden

Abstract

This article uses weekly scanner data from two small U.S. cities to characterize time and state dependence of grocers' pricing decisions. In these data, the probability of a nominal adjustment declines with the time since the last price change. A store's price for a particular product typically goes through several price changes in rapid succession before settling down. We also detect state dependence: The probability of a nominal adjustment is highest when a store's price substantially differs from the average of other stores' prices. However, extreme relative prices typically reflect the store's recent changes instead of changes in average prices.

Suggested Citation

  • Jeffrey R. Campbell & Benjamin Eden, 2014. "Rigid Prices: Evidence From U.S. Scanner Data," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55, pages 423-442, May.
  • Handle: RePEc:wly:iecrev:v:55:y:2014:i::p:423-442
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    File URL: http://hdl.handle.net/10.1111/iere.12055
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General

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