The Size and Frequency of Price Changes: Evidence from Grocery Stores

The Size and Frequency of Price Changes: Evidence from Grocery Stores We analyze a data set (on grocerystore prices for lettuce) with many advantages overthose used previously to explain firm heterogeneity inthe size and frequency of price changes. Despitecommon shocks to their input price, grocers' pricechanges vary widely in size and frequency. We testhypotheses emerging from a theoretical framework. Wefind that product, firm, and market characteristicsassociated with the benefits from and costs ofchanging price explain grocer-to-grocer variation inthe size and frequency of price changes. Moreconcentrated markets, larger firm size, and thinnerproduct markets lead to infrequent and large pricechanges. Review of Industrial Organization Springer Journals

The Size and Frequency of Price Changes: Evidence from Grocery Stores

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Kluwer Academic Publishers
Copyright © 2001 by Kluwer Academic Publishers
Economics; Industrial Organization; Microeconomics
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