Uniform Pricing Within and Across Regions: New Evidence from Argentina

Diego Daruich and Julian Kozlowski

No 669, 2019 Meeting Papers from Society for Economic Dynamics

Abstract: We compile a new database of grocery prices in Argentina with over 9 million observations per day. Our main novel finding is that products’ prices almost do not vary within stores of a chain (i.e., uniform pricing). We also find that prices do not change significantly with regional conditions or shocks, particularly so for chains that operate in many regions. To study the impact of uniform pricing on both consumers and firms, this paper uses a tractable model based on the trade literature. Motivated by our empirical findings, each firm has to set a unique price in both regions. Relative to a counterfactual in which firms can set different prices across regions (i.e., flexible pricing), uniform pricing reduces firm’s profits by 0.7%. Consumers, however, prefer uniform pricing and are willing to give up 3.8% of their income to avoid flexible pricing in the baseline model. The effect on consumers, however, depends on how much uniform pricing limits firms’ power to extract consumer surplus and how heterogeneous the regions are.

Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2019/paper_669.pdf (application/pdf)

Related works:
Working Paper: Uniform Pricing Within and Across Regions: New Evidence from Argentina (2018)
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:red:sed019:669

Access Statistics for this paper

More papers in 2019 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().