Borraz, Fernando and Zipitría, Leandro (2010): Price Setting in Retailing: the Case of Uruguay.
This is the latest version of this item.
Download (286kB) | Preview
We use a rich and unique dataset of 30 million daily prices in groceries and supermarkets across the country to analyze stylized facts of the behaviour of consumer prices. Our findings are as follows: i) The median duration of prices is two months and half. Therefore, retail prices in Uruguay are less sticky than in the US, Brazil and Chile, but stickier than in the UK. ii) We do not find evidence of a seasonal pattern in the likelihood of price adjustments. iii) The frequency of price adjustment is only correlated with expected inflation for the personal care product category. However, for the food category we find that firms changes the percentage points of the adjustment and not their frequency. iv) The probability of price change in the first day of the month is nine times higher than in any another day. v) The probability of a price change is not constant over time. Therefore, the evidence presented in this paper indicates that price stickiness in Uruguay is low, in consequence there are doubts regarding the effectiveness of monetary policy.
|Item Type:||MPRA Paper|
|Original Title:||Price Setting in Retailing: the Case of Uruguay|
|Keywords:||Retail; micro data; prices; price volatility; sticky prices|
|Subjects:||L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L16 - Industrial Organization and Macroeconomics: Industrial Structure and Structural Change ; Industrial Price Indices
L - Industrial Organization > L8 - Industry Studies: Services > L81 - Retail and Wholesale Trade ; e-Commerce
E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation
D - Microeconomics > D4 - Market Structure, Pricing, and Design > D40 - General
|Depositing User:||Unnamed user with email email@example.com|
|Date Deposited:||19 Feb 2011 05:46|
|Last Modified:||19 Jun 2016 03:55|
Barros, Rebecca, Marco Bonomo, Carlos Carvalho, and Silvia Matos (2009), “Price Setting in a Variable Macroeconomic Environment: Evidence from Brazilian CPI,” unpublished paper, Getulio Vargas Foundation and Federal Reserve Bank of New York.
Chaumont, Gastón, Miguel Fuentes, Felipe Labbé and Alberto Naudon (2010), “A Reassessment of Flexible Price Evidence using Scanner Data: Evidence form an Emerging Economy,” unpublished paper, Banco Central de Chile.
Ellis, Colin (2009), “Do supermarket prices change from week to week?” Bank of England Working Paper No. 378, November.
Gopinath, Gita and Roberto Rigobon (2008), “Stitcky Borders,” The Quarterly Journal of Economics, vol. 123, issue 2; 531-75.
Klenow, Peter J. and Benjamin A. Malin (2010), “Microeconomic Evidence on Price-Setting” NBER Working Paper 15826.
Medina, Juan Pablo, David Rappoport, and Claudio Soto (2007), “Dynamics of Price Adjustment: Evidence from Micro Level Data for Chile,” Central Bank of Chile Working Paper 432.
Nakamura, Emi (2008): “Pass-Trough in Retail and Wholesale,” American Economic Review, 98(2), 430-7.
Nakamura, Emi and Jón Steinsson (2008): “Five Facts About Prices: A Reevaluation of Menu Cost Models” The Quarterly Journal of Economics, vol. 123, issue 4; 1415-64.
Available Versions of this Item
Price Setting in Retailing: the Case of Uruguay. (deposited 28 Dec 2010 01:57)
- Price Setting in Retailing: the Case of Uruguay. (deposited 19 Feb 2011 05:46) [Currently Displayed]