Heterogeneity in Consumer Price Stickiness: A Microeconometric Investigation

Denis Fougere, Hervé Le Bihan and Patrick Sevestre

No 2006-26, Working Papers from Center for Research in Economics and Statistics

Abstract: We examine heterogeneity in price stickiness using a large, original, setof individual price data collected at the retail level for the computationof the French CPI. For that purpose, we estimate at a very high level ofdisaggregation competing-risks duration models that distinguish betweenprice increases, price decreases and product replacements. The main ?nd-ings are the following: i ) at the product-outlet type level, the baselinehazard function of a price spell is non-decreasing ii) cross-product andcross-outlet-type heterogeneity is pervasive, both in the shape of the haz-ard function and in the impact of covariates iii ) there is strong evidence ofstate dependence, especially for price increases iv) there is an asymmetrysince determinants of price increases di¤er from those of price decreases.

Date: 2006
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Related works:
Journal Article: Heterogeneity in Consumer Price Stickiness: A Microeconometric Investigation (2007)
Working Paper: Heterogeneity in consumer price stickiness. A microeconometric investigation (2007)
Working Paper: Heterogeneity in consumer price stickiness. A microeconometric investigation (2007)
Working Paper: Heterogeneity in Consumer Price Stickiness: A Microeconometric Investigation (2005)
Working Paper: Heterogeneity in Consumer Price Stickiness: A Microeconometric Investigation (2005)
Working Paper: Heterogeneity in consumer price stickiness: a microeconometric investigation (2005)
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