Sales and Consumer Inventory

Iga Hendel and Aviv Nevo
Additional contact information
Iga Hendel: University of Wisconsin, Madison & NBER

Microeconomics from University Library of Munich, Germany

Abstract: Temporary price reductions (sales) are quite common for many goods and usually result in an increase in the quantity sold. We explore whether the data support the hypothesis that these increases are, at least partly, due to dynamic consumer behavior: at low prices consumers stockpile for future consumption. This effect, if present, has broad implications for interpretation of demand estimates. We construct a dynamic model of consumer choice and use it to derive testable predictions. We test the implications of the model using two years of store-level scanner data and data on the purchases of a panel of households over the same time. The results support the existence of household stockpiling behavior.

JEL-codes: D4 L (search for similar items in EconPapers)
Pages: 37 pages
Date: 2002-01-04
New Economics Papers: this item is included in nep-mic
Note: 37 pages, Acrobat .pdf
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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https://econwpa.ub.uni-muenchen.de/econ-wp/mic/papers/0201/0201001.pdf (application/pdf)

Related works:
Journal Article: Sales and consumer inventory (2006)
Working Paper: Sales and Consumer Inventory (2002)
Working Paper: Sales and Consumer Inventory (2001)
Working Paper: Sales and Consumer Inventory (2001)
Working Paper: Sales and Consumer Inventory (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpmi:0201001

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