Targeted Price Controls on Supermarket Products

Diego Aparicio and Alberto Cavallo

No 24275, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the impact of targeted price controls for supermarket products in Argentina from 2007 to 2015. Using web-scraping, we collected daily prices for controlled and non-controlled goods and measured the differential effects on inflation, product availability, and price dispersion. We first show that, although price controls are imposed on goods with significant CPI weight, they have a temporary effect on aggregate inflation and no downward effect on other goods. Second, contrary to common beliefs, we find that controlled goods are consistently available for sale. Third, firms compensate for price controls by introducing new product varieties at higher prices. This behavior, which increases price dispersion within narrow categories, is consistent with a standard vertical differentiation model in the presence of price controls.

JEL-codes: D22 E31 (search for similar items in EconPapers)
Date: 2018-02
New Economics Papers: this item is included in nep-agr, nep-com, nep-mac, nep-mkt and nep-mon
Note: IO ME
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Citations: View citations in EconPapers (1)

Published as Diego Aparicio & Alberto Cavallo, 2021. "Targeted Price Controls on Supermarket Products," The Review of Economics and Statistics, vol 103(1), pages 60-71.

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