EconPapers    
Economics at your fingertips  
 

Lumpy Price Adjustments: A Microeconometric Analysis

Emmanuel Dhyne (), Catherine Fuss (), M Pesaran () and Patrick Sevestre

No 2793, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper presents a simple model of state-dependent pricing that allows identification of the relative importance of the degree of price rigidity that is inherent to the price setting mechanism (intrinsic) and that which is due to the price’s driving variables (extrinsic). Using two data sets consisting of a large fraction of the price quotes used to compute the Belgian and French CPI, we are able to assess the role of intrinsic and extrinsic price stickiness in explaining the occurrence and magnitude of price changes at the outlet level. We find that infrequent price changes are not necessarily associated with large adjustment costs. Indeed, extrinsic rigidity appears to be significant in many cases. We also find that asymmetry in the price adjustment could be due to trends in marginal costs and/or desired mark-ups rather than asymmetric cost of adjustment bands.

Keywords: micro non-linear panels; nominal intrinsic and extrinsic rigidities; sticky prices (search for similar items in EconPapers)
JEL-codes: C51 C81 D21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba and nep-mac
Date: 2007-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://ftp.iza.org/dp2793.pdf (application/pdf)

Related works:
Journal Article: Lumpy Price Adjustments: A Microeconometric Analysis (2011) Downloads
Journal Article: Lumpy Price Adjustments: A Microeconometric Analysis (2011) Downloads
Working Paper: Lumpy Price Adjustments: A Microeconometric Analysis (2007) Downloads
Working Paper: Lumpy Price Adjustments, A Microeconometric Analysis (2007) Downloads
Working Paper: Lumpy Price Adjustments: A Microeconometric Analysis (2007) Downloads
Working Paper: Lumpy price adjustments: a microeconometric analysis (2006) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp2793

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().

 
Page updated 2019-07-20
Handle: RePEc:iza:izadps:dp2793