Identifying Price Reviews by Firms: An Econometric Approach
Price reviews are a potentially costly activity. A significant fraction of unchanged prices may stem from firms not reviewing prices, rather than from obstacles to changing prices per se, such as menu costs. In this paper, we disentangle these two causes of price stickiness by estimating an inflated...
| Main Authors: | , , |
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| Format: | Journal Article |
| Language: | English |
| Published: |
WILEY
2019
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| Subjects: | |
| Online Access: | http://hdl.handle.net/20.500.11937/78299 |
| _version_ | 1848763955968737280 |
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| author | Harris, Mark Le Bihan, H. Sevestre, P. |
| author_facet | Harris, Mark Le Bihan, H. Sevestre, P. |
| author_sort | Harris, Mark |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | Price reviews are a potentially costly activity. A significant fraction of unchanged prices may stem from firms not reviewing prices, rather than from obstacles to changing prices per se, such as menu costs. In this paper, we disentangle these two causes of price stickiness by estimating an inflated ordered probit model on a panel of French manufacturing firms. The results point to a low frequency of price reviews, suggestive of the relevance of information costs as a determinant of the observed price stickiness. In view of the “inattentive producers” literature, pointing that the source of price rigidity matters, this is suggestive of a large real effect of monetary policy. |
| first_indexed | 2025-11-14T11:11:41Z |
| format | Journal Article |
| id | curtin-20.500.11937-78299 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T11:11:41Z |
| publishDate | 2019 |
| publisher | WILEY |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-782992020-06-12T07:44:50Z Identifying Price Reviews by Firms: An Econometric Approach Harris, Mark Le Bihan, H. Sevestre, P. Social Sciences Business, Finance Economics Business & Economics C23 C25 E31 price stickiness price reviews price changes inflated ordered probit model COSTS ADJUSTMENT BEHAVIOR MODELS Price reviews are a potentially costly activity. A significant fraction of unchanged prices may stem from firms not reviewing prices, rather than from obstacles to changing prices per se, such as menu costs. In this paper, we disentangle these two causes of price stickiness by estimating an inflated ordered probit model on a panel of French manufacturing firms. The results point to a low frequency of price reviews, suggestive of the relevance of information costs as a determinant of the observed price stickiness. In view of the “inattentive producers” literature, pointing that the source of price rigidity matters, this is suggestive of a large real effect of monetary policy. 2019 Journal Article http://hdl.handle.net/20.500.11937/78299 10.1111/jmcb.12675 English WILEY restricted |
| spellingShingle | Social Sciences Business, Finance Economics Business & Economics C23 C25 E31 price stickiness price reviews price changes inflated ordered probit model COSTS ADJUSTMENT BEHAVIOR MODELS Harris, Mark Le Bihan, H. Sevestre, P. Identifying Price Reviews by Firms: An Econometric Approach |
| title | Identifying Price Reviews by Firms: An Econometric Approach |
| title_full | Identifying Price Reviews by Firms: An Econometric Approach |
| title_fullStr | Identifying Price Reviews by Firms: An Econometric Approach |
| title_full_unstemmed | Identifying Price Reviews by Firms: An Econometric Approach |
| title_short | Identifying Price Reviews by Firms: An Econometric Approach |
| title_sort | identifying price reviews by firms: an econometric approach |
| topic | Social Sciences Business, Finance Economics Business & Economics C23 C25 E31 price stickiness price reviews price changes inflated ordered probit model COSTS ADJUSTMENT BEHAVIOR MODELS |
| url | http://hdl.handle.net/20.500.11937/78299 |