Heterogeneity in Price Rigidity: Evidence from a Case Study Using Micro-Level Data

Daniel Levy (), Shantanu Dutta and Mark Bergen
Additional contact information
Shantanu Dutta: University of Southern California
Mark Bergen: University of Minnesota

No 2002-09, Working Papers from Bar-Ilan University, Department of Economics

Abstract: We combine two data sets to study price rigidity. The first consists of weekly time series of retail, wholesale, and spot prices for twelve products. These time series contain two exogenous cost shocks. We find that prices exhibit more rigidity in response to the second shock than the first. The second data set consists of all publicly available information about the shocks. Content analysis of these information reveals that the first shock is larger and more persistent, and the market has more information on it than the second. We conclude, therefore, that prices are more flexible in response to cost shocks that are larger, that are more persistent, and on which market participants have more information.

Keywords: price rigidity; cost shock; shock persistence; market information (search for similar items in EconPapers)
JEL-codes: E12 E31 L16 (search for similar items in EconPapers)
Date: 2002-04
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Citations: View citations in EconPapers (81)

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Related works:
Working Paper: Heterogeneity in Price Rigidity: Evidence from a Case Study Using Micro-Level Data (2004)
Journal Article: Heterogeneity in Price Rigidity: Evidence from a Case Study Using Microlevel Data (2002)
Journal Article: Heterogeneity in Price Rigidity: Evidence from a Case Study Using Microlevel Data (2002)
Working Paper: Heterogeneity in Price Rigidity: Evidence from a Case Study Using Micro-Level Data (2002)
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