Existence and Persistence of Price Dispersion: an Empirical Analysis

Saul Lach

No 8737, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using a unique data set on store-level monthly prices of four homogenous products sold in Israel, I study the existence and characteristics of the dispersion of prices across stores, as well as its persistence over time. I find that price dispersion prevails even after controlling for observed and unobserved product heterogeneity. Moreover, intra-distribution mobility is significant: stores move up and down the cross-sectional price distribution. Thus, consumers cannot learn about stores that consistently post low prices. As a consequence, price dispersion does not disappear and persists over time as predicted by Varian's (1980) model of sales.

JEL-codes: L11 (search for similar items in EconPapers)
Date: 2002-01
Note: IO PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (146)

Published as Lach, Saul. "Existence And Persistence Of Price Dispersion: An Empirical Analysis," Review of Economics and Statistics, 2002, v84(3,Aug), 433-444.

Downloads: (external link)
http://www.nber.org/papers/w8737.pdf (application/pdf)

Related works:
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:nbr:nberwo:8737

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w8737

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().