Artikel

Price Flexibility in Channels of Distribution: Evidence from Scanner Data

In this study, we empirically examine the extent of price rigidity using a unique store-level time-series data set – consisting of (i) actual retail transaction prices, (ii) actual wholesale transaction prices which represent both the retailers’ costs and the prices received by manufacturers, and (iii) a measure of manufacturers’ costs – for 12 goods in two widely used consumer product categories. We simultaneously examine the extent of price rigidity for each of the 12 products at both, final goods and intermediate goods levels. We study two notions of price rigidity employed in the existing literature: (i) the frequency of price changes, and (ii) the response of prices to exogenous cost changes. We find that retail prices exhibit remarkable flexibility in terms of both notions of price rigidity, i.e., they change frequently and they seem to respond quickly and fully to cost changes. Furthermore, we find that retail prices respond not just to their direct costs, but also to the upstream manufacturers’ costs, which further reinforces the extent of the retail price flexibility. At the intermediate goods level of the market, in contrast, we find relatively more evidence of rigidity in the response of manufacturers prices to cost changes. This despite the fact that wholesale prices change frequently and therefore exhibit flexibility according to the first notion of price rigidity.

Sprache
Englisch

Erschienen in
Journal: Journal of Economic Dynamics and Control ; ISSN: 0165-1889 ; Volume: 26 ; Year: 2002 ; Issue: 11 ; Pages: 1845-1900 ; Amsterdam: Elsevier

Klassifikation
Wirtschaft
General Aggregative Models: Keynes; Keynesian; Post-Keynesian
Price Level; Inflation; Deflation
Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices
Thema
Price Flexibility/Rigidity
Intermediate and Final Goods Markets
Stages of Processing

Ereignis
Geistige Schöpfung
(wer)
Dutta, Shantanu
Bergen, Mark
Levy, Daniel
Ereignis
Veröffentlichung
(wer)
Elsevier
ZBW – Leibniz Information Centre for Economics
(wo)
Amsterdam
(wann)
2002

DOI
doi:10.1016/S0165-1889(01)00012-4
Handle
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

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Objekttyp

  • Artikel

Beteiligte

  • Dutta, Shantanu
  • Bergen, Mark
  • Levy, Daniel
  • Elsevier
  • ZBW – Leibniz Information Centre for Economics

Entstanden

  • 2002

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