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The frequency and size of price adjustment: microeconomic evidence

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  • Attila Rátfai

    (Central European University, Budapest, Hungary)

Abstract

This paper presents direct, non-parametric microeconomic evidence on pricing behavior and evaluates the findings in light of theories of nominal price rigidity. The main issues examined include the durability of price quotations and the size of price changes. The analysis is based on a unique high-frequency panel data set of consumer prices recorded in 1993-1996 in Hungary. The results indicate that price adjustment patterns in the sample are primarily consistent with implications of two-sided (S,s) pricing models. Copyright © 2007 John Wiley & Sons, Ltd.

Suggested Citation

  • Attila Rátfai, 2007. "The frequency and size of price adjustment: microeconomic evidence," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 751-762.
  • Handle: RePEc:wly:mgtdec:v:28:y:2007:i:7:p:751-762
    DOI: 10.1002/mde.1381
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    References listed on IDEAS

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    Cited by:

    1. Silvia Fabiani & Angela Gattulli & Giovanni Veronese & Roberto Sabbatini, 2010. "Price adjustment in Italy: evidence from micro producer and consumer prices," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 31(2-3), pages 93-104.
    2. Zsuzsanna Zsibók & Balázs Varga, 2012. "Inflation Persistence in Hungary: a Spatial Analysis," Working Papers 1203, Department of Mathematical Economics and Economic Analysis, Corvinus University of Budapest.
    3. Emmanuel Dhyne & Jerzy Konieczny & Fabio Rumler & Patrick Sevestre, 2009. "Price rigidity in the euro area - An assessment," European Economy - Economic Papers 2008 - 2015 380, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    4. Erwan Gautier, 2009. "Les ajustements microéconomiques des prix : une synthèse des modèles théoriques et résultats empiriques," Revue d'économie politique, Dalloz, vol. 119(3), pages 323-372.
    5. Daniel Levy, 2007. "Price rigidity and flexibility: new empirical evidence," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 639-647.
    6. Wasim Shahid Malik & Ahsan ul Haq Satti & Ghulam Saghir, 2008. "Price Setting Behaviour of Pakistani Firms: Evidence from Four Industrial Cities of Punjab," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 47(3), pages 247-266.
    7. Caglayan, Mustafa & Filiztekin, Alpay, 2012. "The law of one price and the role of market structure," MPRA Paper 36975, University Library of Munich, Germany.
    8. Patrick Lünnemann & Thomas Y. Mathä, 2010. "Consumer price behaviour: evidence from Luxembourg micro data," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 31(2-3), pages 177-192.
    9. Júlia Lendvai, 2005. "Hungarian Inflation Dynamics," MNB Occasional Papers 2005/46, Magyar Nemzeti Bank (Central Bank of Hungary).
    10. Roman Horváth, 2011. "The frequency and size of price changes: evidence from non-parametric estimations," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 4(2), pages 263-268, February.
    11. Péter Gábriel & Ádám Reiff, 2010. "Price setting in Hungary-a store-level analysis," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 31(2-3), pages 161-176.

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