Rigid Prices: Evidence from U.S. Scanner Data

45 Pages Posted: 26 Oct 2005 Last revised: 10 Aug 2010

See all articles by Jeffrey R. Campbell

Jeffrey R. Campbell

University of Notre Dame; Tilburg University

Benjamin Eden

University of Haifa - Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: July 22, 2010

Abstract

This paper uses over two years of weekly scanner data from two small US cities to characterize time and state dependence of grocers' pricing decisions. In these data, the probability of a nominal adjustment declines with the time since the last price change. This reflects differences over time in the flexibility of prices charged by a single store for a given good. We also detect state dependence: The probability of a nominal adjustment is highest when a store's price substantially differs from the average of other stores. However, extreme prices typically reflect the selling store's recent nominal adjustments rather than changes in other stores' prices.

Keywords: Nominal Price Adjustment, Scanner Data, Time Dependence, State Dependence

JEL Classification: E31, L16, L81

Suggested Citation

Campbell, Jeffrey R. and Eden, Benjamin, Rigid Prices: Evidence from U.S. Scanner Data (July 22, 2010). FRB Chicago Working Paper No. 2005-08, Available at SSRN: https://ssrn.com/abstract=829005 or http://dx.doi.org/10.2139/ssrn.829005

Jeffrey R. Campbell (Contact Author)

University of Notre Dame ( email )

United States

Tilburg University ( email )

Tilburg, 5000 LE
Netherlands

Benjamin Eden

University of Haifa - Department of Economics ( email )

Haifa 31905
Israel
+972 4 8249238 (Phone)
+972 4 8240059 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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