Pricing in inflationary times: The penny drops

Ratula Chakraborty, Paul Dobson, Jonathan S. Seaton and Michael Waterson

Journal of Monetary Economics, 2015, vol. 76, issue C, 71-86

Abstract: How does the frequency and magnitude of micro-price rises and falls relate to macroeconomic crisis, as well as moderation? Weekly micropricing behaviour in British groceries was investigated across three leading retailers over the moderation period 2004–7 and the crisis period 2008–10. We find significant price flexibility sharply distinguished from behaviour observed in most previous works. Downward price flexibility increased markedly in 2008. Overall basket prices rise, but significantly more individual prices fall than rise in the latter period. Tests of obfuscation in price setting suggested that large numbers of small price falls were used to disguise the basket price rises.

Keywords: Pricing behaviour; Supermarket prices; Inflationary behaviour; Price indexes (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (34)

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Related works:
Working Paper: Pricing in inflationary times- the penny drops (2011)
Working Paper: Pricing in inflationary times- the penny drops (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:76:y:2015:i:c:p:71-86

DOI: 10.1016/j.jmoneco.2015.08.002

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