A Reassessment of Flexible Price Evidence Using Scanner Data: Evidence from an Emerging Economy

Gaston Chaumont, Miguel Fuentes, Felipe Labbé () and Alberto Naudon ()

Working Papers Central Bank of Chile from Central Bank of Chile

Abstract: In this paper we use a new database of scanner-level prices for the Chilean economy to characterize the microeconomic behavior of prices during a period of high inflation. We are able to characterize the price-setting behavior by supermarket chain. The evidence indicates that there is significant heterogeneity in the pricing behavior of individual retailers. Analyzing the source of shocks, results show that even though chain-specific shocks account for a sizable fraction of the observed variation, common (i.e. countrywide) shocks to individual goods and product categories are the most important factors to explain the behavior of prices. In other words, the pricing strategy of retailers seems less important in developing countries to explain microeconomic price dynamics.

Date: 2011-08
New Economics Papers: this item is included in nep-cba, nep-com and nep-hme
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:chb:bcchwp:641

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