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Rigidities and adjustments of daily prices to costs : evidence from supermarket data
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Giulietti, Monica, Otero, Jesus and Waterson, Michael (2019) Rigidities and adjustments of daily prices to costs : evidence from supermarket data. Working Paper. Coventry: University of Warwick. Department of Economics. Warwick economics research papers series (WERPS) (1187). (Unpublished)
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Official URL: https://warwick.ac.uk/fac/soc/economics/research/w...
Abstract
We assess the extent of inertia in grocery retail prices using data on prices and costs from a large supermarket chain in Colombia. Relative to previous work our analysis benefits from the daily frequency of the data and the availability of reliable replacement cost data. We uncover evidence supporting the existence of significant nominal rigidities in reference prices (three months) and even more so in reference costs (about five months). There is evidence that the price and cost rigidities differ depending on the type of product, being on average smaller in the case of perishable goods. Using an Error Correction Model framework, we examine the path of prices relative to costs, to determine the speed of adjustment of prices to shocks.
| Item Type: | Working or Discussion Paper (Working Paper) | ||||||
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| Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HE Transportation and Communications |
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| Divisions: | Faculty of Social Sciences > Economics | ||||||
| Library of Congress Subject Headings (LCSH): | Grocery trade -- Prices -- Colômbia, Supermarkets -- Colômbia | ||||||
| Series Name: | Warwick economics research papers series (WERPS) | ||||||
| Publisher: | University of Warwick. Department of Economics | ||||||
| Place of Publication: | Coventry | ||||||
| ISSN: | 0083-7350 | ||||||
| Official Date: | January 2019 | ||||||
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| Number: | 1187 | ||||||
| Number of Pages: | 39 | ||||||
| Institution: | University of Warwick | ||||||
| Status: | Not Peer Reviewed | ||||||
| Publication Status: | Unpublished | ||||||
| Access rights to Published version: | Open Access | ||||||
| RIOXX Funder/Project Grant: |
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