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Macroeconomic Implications of Uniform Pricing

Diego Daruich and Julian Kozlowski

American Economic Journal: Macroeconomics, 2023, vol. 15, issue 3, 64-108

Abstract: We compile a new database of grocery prices in Argentina. We find uniform pricing both within and across regions—i.e., prices almost do not vary within the stores of a chain. In line with uniform pricing, prices in stores of chains operating in one region react to changes in regional employment while prices in multiregion chains do not. Using a quantitative regional model with multiregion firms and uniform pricing, we find a one-half smaller elasticity of prices to a regional than an aggregate shock. This result highlights that some caution may be necessary when using regional shocks to estimate aggregate elasticities.

JEL-codes: D22 L11 L81 O14 O18 R32 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1257/mac.20210172

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Handle: RePEc:aea:aejmac:v:15:y:2023:i:3:p:64-108