Working Paper: NBER ID: w17126
Authors: Martin Berka; Michael B. Devereux; Thomas Rudolph
Abstract: We study a newly released data set of scanner prices for food products in a large Swiss online supermarket. We find that average prices change about every two months, but when we exclude temporary sales, prices are extremely sticky, changing on average once every three years. Non-sale price behavior is broadly consistent with menu cost models of sticky prices. When we focus specifically on the behavior of sale prices, however, we find that the characteristics of price adjustment seems to be substantially at odds with standard theory.
Keywords: No keywords provided
JEL Codes: E3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| price stickiness (L11) | frequency of price changes (E30) |
| inflation levels (E31) | frequency of reference price changes (E30) |
| sales prices (P22) | size of price reductions (D49) |