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Inside The Price Dispersion Box: Evidence From Us Scanner Data

Listed author(s):
  • Benjamin Eden

    ()

    (Vanderbilt University)

  • Maya Eden

    ()

    (World Bank)

  • Jonah Yuen

    ()

    (Vanderbilt University)

To characterize the cross sectional price distribution of supermarket prices, we divide the stores in each good-week combination (UPC-week cell) into bins according to their price. For example, in the 3 bins division case we have a high price bin, a medium price bin and a low price bin. Our main findings are: (a) The variations over weeks in the (cross sectional) average price and quantity sold is lower for higher price bins; (b) Temporary sales contribute substantially to variations over weeks in the average price of the typical good; (c) The elasticity of the quantity sold by stores in the high price bin with respect to the quantity sold by stores in a low price bin (the quantity elasticity) is less than unity; (d) The elasticity of the quantity sold by stores in the high price bin with respect to the price in a low price bin (the cross price elasticity) is positive but less than the absolute value of the own price elasticity. More generally, we provide results about elasticities within UPC-week cells, variations over weeks within UPC and the role of temporary sales.

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File URL: http://www.accessecon.com/pubs/VUECON/VUECON-16-00017.pdf
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Paper provided by Vanderbilt University Department of Economics in its series Vanderbilt University Department of Economics Working Papers with number 16-00017.

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Date of creation: 21 Sep 2016
Handle: RePEc:van:wpaper:vuecon-sub-16-00017
Contact details of provider: Web page: http://www.vanderbilt.edu/econ/wparchive/index.html

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  21. Martin Eichenbaum & Nir Jaimovich & Sergio Rebelo, 2011. "Reference Prices, Costs, and Nominal Rigidities," American Economic Review, American Economic Association, vol. 101(1), pages 234-262, February.
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