Heterogeneity in Price Rigidity: Evidence from a Case Study Using Micro-Level Data

Daniel Levy (), Shantanu Dutta and Mark Bergen
Additional contact information
Shantanu Dutta: USC
Mark Bergen: Minnesota

Macroeconomics from University Library of Munich, Germany

Abstract: We combine two data sets to study price rigidity. The first consists of weekly time series of retail, wholesale, and spot prices for twelve products. These time series contain two exogenous cost shocks. We find that prices exhibit more rigidity in response to the second shock than the first. The second data set consists of all publicly available information about the shocks. Content analysis of these information reveals that the first shock is larger and more persistent, and the market has more information on it than the second. We conclude, therefore, that prices are more flexible in response to cost shocks that are larger, that are more persistent, and on which market participants have more information.

Keywords: price rigidity; price flexibility; sticky prices; flexible prices; variation in price rigidity; variation in price flexibility; exogeneous shock; cost shock; shock persistence; size of shocks; market information; transaction price data; weekly scanner data; spot price; orange juice; frozen concentrate orange juice; futures price; retail price; wholesale price; publicly available information; market response to information; news; price response to exogenous cost shocks; New Keynesian macroeconomics (search for similar items in EconPapers)
JEL-codes: D83 E12 E31 E50 G13 G14 L11 L15 L16 L22 L66 L81 M21 M31 Q11 Q13 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2004-02-07
New Economics Papers: this item is included in nep-cfn, nep-com, nep-fin, nep-ind and nep-mic
Note: Type of Document - pdf; prepared on Win 98; to print on Any printer; pages: 38 ; figures: Figures are included
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Citations: View citations in EconPapers (17)

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Related works:
Journal Article: Heterogeneity in Price Rigidity: Evidence from a Case Study Using Microlevel Data (2002)
Journal Article: Heterogeneity in Price Rigidity: Evidence from a Case Study Using Microlevel Data (2002)
Working Paper: Heterogeneity in Price Rigidity: Evidence from a Case Study Using Micro-Level Data (2002)
Working Paper: Heterogeneity in Price Rigidity: Evidence from a Case Study Using Micro-Level Data (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:0402021

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