Costs, Demand, and Producer Price Changes

Claire Loupias () and Patrick Sevestre

The Review of Economics and Statistics, 2013, vol. 95, issue 1, 315-327

Abstract: Using business survey data, we estimate an ordered probit model to explain the occurrence of producer price increases and decreases in the French manufacturing industry. Our results show that changes in intermediate input prices are the main driver of producer price changes. Changes in firms' labor costs, their production level, or the producer price index of their industry contribute less to the occurrence of price changes. Moreover, when they face a change in their costs, firms adjust their prices upward more often and more rapidly than they do it downward, especially when the shock is perceived as permanent. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Keywords: price stickiness; frequency of price changes; price setting-behavior; survey data; ordered probit model (search for similar items in EconPapers)
JEL-codes: C23 C25 E31 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (19)

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Related works:
Working Paper: COSTS, DEMAND, AND PRODUCER PRICE CHANGES (2013)
Working Paper: Costs, demand, and producer price changes (2010)
Working Paper: Costs, demand, and producer price changes (2010)
Working Paper: Cost, Demand and Producer Price Changes (2010)
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