Consumer Price-Setting Behaviour:Evidence from Food CPI Microdata

Fernando Martins and João Quelhas

No 2024/0345, Working Papers REM from ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa

Abstract: This paper studies the price-setting behaviour in food products, using the microdata underlying the Portuguese Consumer Price Index (CPI). We document that, on average, more than onequarter of food prices changed every month and half displayed price spells shorter than 5.3 months. Positive price changes were more frequent and had a higher magnitude than price decreases. There is a strong heterogeneity across type of industry and outlet. We find that, from 2009 to 2019, food inflation was primarily driven by the frequency of price changes rather than the magnitude, and price changes were more frequent at the producer than at the consumer level, but in a lower magnitude. Finally, we report that frequency and magnitude estimates are higher when using daily online price data, meaning that intra-month patterns in price dynamics, not captured by the official inflation statistics, are relevant.

Keywords: price stickiness; price-setting behaviour; consumer prices; microdata; inflation. (search for similar items in EconPapers)
JEL-codes: D40 E30 E31 (search for similar items in EconPapers)
Date: 2024-10
New Economics Papers: this item is included in nep-agr and nep-mon
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Related works:
Working Paper: Consumer Price-Setting Behaviour: Evidence from Food CPI Microdata (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:ise:remwps:wp03452024

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