Retailers and Consumers: The pass-through of import price changes

Arbeitspapier

In this paper, we estimate pass-through rates of import price changes to retail prices across retailers and consumers for apparel purchases in Germany for the period of 2000 to 2007. We find that high-price retailers do not pass through changes in the import price. Pass-through rates for low-price retailers are 53% within 3 months. Consequently, pass-through rates for low-income households are 58%, significantly larger than those for high-income households. We then present one possible explanation for these observations in a theoretical model with endogenous vertical product differentiation due to bundling an ex-ante homogeneous import good with services. Following an import price change, retailers who sell a cheaper unbundled product change prices to a greater extent than retailers who sell a higher-priced bundle of product and service.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: cege Discussion Papers ; No. 133 [rev.]

Classification and Topics

• Classification: Wirtschaft ; Consumer Economics: Empirical Analysis ; Personal Income, Wealth, and Their Distributions ; Trade: General
• Subject: import prices ; pass-through ; retailers ; households

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Berner, Eike ; Birg, Laura ; Boddin, Dominik
• Event: Veröffentlichung
• (who): University of Göttingen, Center for European, Governance and Economic Development Research (cege)
• (where): Göttingen
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/142182
• Last update: 10.03.2025, 11:43 AM CET