Intertemporal Substitution and Storable Products

Igal Hendel and Aviv Nevo
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Igal Hendel: University of Wisconsin, Madison and NBER,

Journal of the European Economic Association, 2004, vol. 2, issue 2-3, 536-547

Abstract: Storable products allow consumers to time their purchases to exploit price fluctuations. It has been documented that during promotions consumers buy more. The additional purchases are potentially intended not only for current use, but to be stockpiled for future consumption. This paper discusses the predictions of a consumer inventory model and reviews the available evidence. We then discuss the implications for demand estimation and present estimates of the economic magnitude of the dynamic effect of storability. (JEL: L0, L4, D1, D4) Copyright (c) 2004 The European Economic Association.

Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:tpr:jeurec:v:2:y:2004:i:2-3:p:536-547

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