Pricing in inflationary times: The penny drops

Ratula Chakraborty, Paul W. Dobson, Jonathan S. Seaton, Michael Waterson

Research output: Contribution to journalArticle

11 Citations (Scopus)
15 Downloads (Pure)

Abstract

How does the frequency and magnitude of micro-price rises and falls relate to macroeconomic crisis, as well as moderation? Weekly micropricing behaviour in British groceries was investigated across three leading retailers over the moderation period 2004–7 and the crisis period 2008–10. We find significant price flexibility sharply distinguished from behaviour observed in most previous works. Downward price flexibility increased markedly in 2008. Overall basket prices rise, but significantly more individual prices fall than rise in the latter period. Tests of obfuscation in price setting suggested that large numbers of small price falls were used to disguise the basket price rises.
Original languageEnglish
Pages (from-to)71-86
Number of pages16
JournalJournal of Monetary Economics
Volume76
Early online date20 Aug 2015
DOIs
Publication statusPublished - Nov 2015

Keywords

  • Pricing behaviour
  • supermarket prices
  • inflationary behaviour
  • price indexes

Cite this