Markups for consumers

Bernhard Ganglmair (), Alexander Kann and Ilona Tsanko

No 20-079, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: A central motivating factor for studying price markups is their effect on consumer welfare. Reported estimates of (firm-level) price markups in the literature, however, are often focused on industry or cross-country comparisons. These treat different industries equally rather than based on how relevant they are for consumers. We propose markup measures in which firm-level price markups are weighted according to consumption expenditures in the respective industries. Using a concordance table between consumption categories (otherwise used for the calculation of consumer price indices) and a firm's industry classification, we report results for Germany for the years 2002 through 2016. We find that consumption-weighted price markups are higher than the conventionally reported revenue-weighted markups. We further show that consumption-weighted markups have increased faster, in particular for medium-income households, which highlights a potential role of price markup as a contributing factor to changes of inequality in society.

Keywords: COICOP; consumption weights; Germany; inequality; price markups (search for similar items in EconPapers)
JEL-codes: D63 E31 K21 L11 L40 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-ind and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/227715/1/1743123841.pdf (application/pdf)

Related works:
Journal Article: Markups for Consumers (2021)
Working Paper: Markups for Consumers (2021)
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:zbw:zewdip:20079

Access Statistics for this paper

More papers in ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().