Restaurant Prices and the Minimum Wage

Denis Fougere, Erwan Gautier and Hervé Le Bihan

Journal of Money, Credit and Banking, 2010, vol. 42, issue 7, 1199-1234

Abstract: In this paper, we examine the effect of the minimum wage on restaurant prices. We contribute both to the study of economic impact of the minimum wage and to the study of microeconomic patterns of price stickiness. For this purpose, we use a unique data set of individual price quotes collected to calculate the Consumer Price Index in France and we estimate a price rigidity model based on a flexible rule. We find a positive and significant impact of the minimum wage on prices. The effect of the minimum wage on prices is, however, very protracted. A change in the minimum wage takes more than a year to fully pass through to retail prices. Copyright (c) 2010 The Ohio State University.

Date: 2010
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Related works:
Journal Article: Restaurant Prices and the Minimum Wage (2010)
Working Paper: Restaurant Prices and the Minimum Wage (2009)
Working Paper: Restaurant Prices and the Minimum Wage (2009)
Working Paper: RESTAURANT PRICES AND THE MINIMUM WAGE (2008)
Working Paper: Restaurant Prices and the Minimum Wage (2008)
Working Paper: Restaurant Prices and the Minimum Wage (2008)
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