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Shopping Time

Author

Listed:
  • Nicolas Petrosky-Nadeau

    (Tepper School of Business)

  • Etienne Wasmer

    (Département d'économie)

  • Shutian Zeng

Abstract

There is a renewed interest in macroeconomic theories of search frictions in the goods market that help solve quantitative puzzles on amplification and persistence of GDP, sales, inventory and advertisement. This requires a deeper understanding of the cyclical properties of the intensive margins of search in this market. Using the American Time Use Survey we construct an indicator of shopping time. It includes both searching and purchasing goods and is based on 25 time use categories (out of more than 400 categories). We find that average time spent shopping declined in the aggregate over the period 2008–2010 compared to 2005–2007. The decline was largest for the unemployed who went from spending more time shopping for goods than the employed to roughly the same, or even less, time. Cross-state and individual regressions indicate pro-cyclical consumer shopping time in the goods market. This evidence poses a challenge for models in which price comparisons are a driver of business cycles.

Suggested Citation

  • Nicolas Petrosky-Nadeau & Etienne Wasmer & Shutian Zeng, 2016. "Shopping Time," Sciences Po publications info:hdl:2441/3bi2m7jdvh8, Sciences Po.
  • Handle: RePEc:spo:wpmain:info:hdl:2441/3bi2m7jdvh8ft9m3o2c19do3i8
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    References listed on IDEAS

    as
    1. Kjetil Storesletten & Jose-Victor Rios Rull & Yan Bai, 2011. "Demand Shocks that Look Like Productivity Shocks," 2011 Meeting Papers 99, Society for Economic Dynamics.
    2. Petrosky-Nadeau, Nicolas & Wasmer, Etienne, 2015. "Macroeconomic dynamics in a model of goods, labor, and credit market frictions," Journal of Monetary Economics, Elsevier, vol. 72(C), pages 97-113.
    3. Luigi Paciello & Andrea Pozzi & Nicholas Trachter, 2019. "Price Dynamics With Customer Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(1), pages 413-446, February.
    4. Christian Broda & David E. Weinstein, 2010. "Product Creation and Destruction: Evidence and Price Implications," American Economic Review, American Economic Association, vol. 100(3), pages 691-723, June.
    5. Diamond, Peter A, 1982. "Aggregate Demand Management in Search Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 881-894, October.
    6. Petrosky-Nadeau, Nicolas & Wasmer, Etienne, 2015. "Macroeconomic dynamics in a model of goods, labor, and credit market frictions," Journal of Monetary Economics, Elsevier, vol. 72(C), pages 97-113.
    7. François Gourio & Leena Rudanko, 2014. "Customer Capital," Review of Economic Studies, Oxford University Press, vol. 81(3), pages 1102-1136.
    8. Greg Kaplan & Guido Menzio, 2016. "Shopping Externalities and Self-Fulfilling Unemployment Fluctuations," Journal of Political Economy, University of Chicago Press, vol. 124(3), pages 771-825.
    9. Pascal Michaillat & Emmanuel Saez, 2014. "An Economical Business-Cycle Model," Working Papers Series 6, Institute for New Economic Thinking.
    10. Petrosky-Nadeau, Nicolas & Wasmer, Etienne, 2015. "Macroeconomic dynamics in a model of goods, labor, and credit market frictions," Journal of Monetary Economics, Elsevier, vol. 72(C), pages 97-113.
    11. Den Haan, Wouter J., 2014. "Inventories and the role of goods-market frictions for business cycles," LSE Research Online Documents on Economics 58231, London School of Economics and Political Science, LSE Library.
    12. Petrosky-Nadeau, Nicolas & Wasmer, Etienne, 2015. "Macroeconomic dynamics in a model of goods, labor, and credit market frictions," Journal of Monetary Economics, Elsevier, vol. 72(C), pages 97-113.
    13. Den Haan, Wouter, 2013. "Inventories and the Role of Goods-Market Frictions for Business Cycles," CEPR Discussion Papers 9628, C.E.P.R. Discussion Papers.
    14. repec:pri:cepsud:234kaplan is not listed on IDEAS
    15. Robert E. Hall, 2012. "The Cyclical Response of Advertising Refutes Counter-Cyclical Profit Margins in Favor of Product-Market Frictions," NBER Working Papers 18370, National Bureau of Economic Research, Inc.
    16. Mark Aguiar & Erik Hurst & Loukas Karabarbounis, 2013. "Time Use during the Great Recession," American Economic Review, American Economic Association, vol. 103(5), pages 1664-1696, August.
    17. Daniel S. Hamermesh & Harley Frazis & Jay Stewart, 2005. "Data Watch: The American Time Use Survey," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 221-232, Winter.
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    Cited by:

    1. Petrosky-Nadeau, Nicolas & Wasmer, Etienne, 2015. "Macroeconomic dynamics in a model of goods, labor, and credit market frictions," Journal of Monetary Economics, Elsevier, vol. 72(C), pages 97-113.
    2. Brzustowski, Thomas & Petrosky-Nadeau, Nicolas & Wasmer, Etienne, 2018. "Disentangling goods, labor, and credit market frictions in three European economies," Labour Economics, Elsevier, vol. 50(C), pages 180-196.
    3. Pau Roldan & Sophia Gilbukh, 2017. "Firm Dynamics and Pricing under Customer Capital Accumulation," 2017 Meeting Papers 1235, Society for Economic Dynamics.
    4. Petrosky-Nadeau, Nicolas & Wasmer, Etienne, 2015. "Macroeconomic dynamics in a model of goods, labor, and credit market frictions," Journal of Monetary Economics, Elsevier, vol. 72(C), pages 97-113.
    5. Petrosky-Nadeau, Nicolas & Wasmer, Etienne, 2015. "Macroeconomic dynamics in a model of goods, labor, and credit market frictions," Journal of Monetary Economics, Elsevier, vol. 72(C), pages 97-113.

    More about this item

    Keywords

    Goods market search; Time allocation; American time use survey; Business cycles;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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