If You Think 9-Ending Prices Are Low, Think Again

Avichai Snir and Daniel Levy ()

MPRA Paper from University Library of Munich, Germany

Abstract: 9-ending prices, which comprise between 40%–95% of retail prices, are popular because shoppers perceive them as being low. We study whether this belief is justified using scanner price-data with over 98-million observations from a large US grocery-chain. We find that 9-ending prices are higher than non 9-ending prices, by as much as 18%. Two factors explain why shoppers believe, mistakenly, that 9-ending prices are low. First, we find that among sale-prices, 9-ending prices are indeed lower than non 9-ending prices, giving 9-ending prices an aura of being low. Second, at first, 9-ending prices were indeed lower than other prices. Shoppers, therefore, learned to associate 9-endings with low prices. Over time, however, 9-ending prices rose substantially, which shoppers failed to notice, because the continuous use of 9-ending prices for promoting deep price cuts draws shoppers’ attention to them, and helps to maintain-and-preserve the image of 9-ending prices as bargain prices.

Keywords: Behavioral Pricing; Psychological Prices; Price Perception; Image Effect; 9-Ending Prices; Price Points; Regular Prices; Sale Prices; Sale Filter (search for similar items in EconPapers)
JEL-codes: D12 D22 D40 D87 D90 D91 E31 E50 K22 L11 L16 L81 M21 M30 M31 (search for similar items in EconPapers)
Date: 2019-10-18
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/96614/1/MPRA_paper_96614.pdf original version (application/pdf)

Related works:
Journal Article: If You Think 9-Ending Prices Are Low, Think Again (2021)
Journal Article: If You Think 9-Ending Prices Are Low, Think Again (2021)
Working Paper: If You Think 9-Ending Prices Are Low, Think Again (2019)
Working Paper: If You Think 9-Ending Prices Are Low, Think Again (2019)
Working Paper: If You Think 9-Ending Prices Are Low, Think Again (2019)
Working Paper: If You Think 9-Ending Prices Are Low,Think Again (2019)
Working Paper: If You Think 9-Ending Prices Are Low, Think Again (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:96614

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().