Inside the Price Dispersion Box: Evidence from U.S. Scanner Data

No 512, 2017 Meeting Papers from Society for Economic Dynamics

Abstract: To characterize the cross sectional price distribution of supermarket prices, we divide the stores in each good-week combination (UPC-week cell) into bins according to their price. For example, in the 3 bins division case we have a high price bin, a medium price bin and a low price bin. Our main findings are: (a) The variations over weeks in the (cross sectional) average price and quantity sold is lower for higher price bins; (b) Temporary sales contribute substantially to variations over weeks in the average price of the typical good; (c) The elasticity of the quantity sold by stores in the high price bin with respect to the quantity sold by stores in a low price bin (the quantity elasticity) is less than unity; (d) The elasticity of the quantity sold by stores in the high price bin with respect to the price in a low price bin (the cross price elasticity) is positive but less than the absolute value of the own price elasticity. More generally, we provide results about elasticities within UPC-week cells, variations over weeks within UPC and the role of temporary sales.

Date: 2017
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Related works:
Working Paper: INSIDE THE PRICE DISPERSION BOX: EVIDENCE FROM US SCANNER DATA (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed017:512

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