Abstract
We study the rigidity of regular and sale prices, and how it is affected by pricing formats (i.e. pricing strategies). We use data from three large Canadian stores with different pricing formats (Every-Day-Low-Price, Hi-Lo and Hybrid) that are located within a 1 km radius of each other. Our data contain both the actual transaction prices and actual regular prices as displayed on the store shelves. We combine these data with two ‘generated’ regular price series (filtered prices and reference prices) and study their rigidity. Regular price rigidity varies with store formats because different format stores treat sale prices differently, and consequently define regular prices differently. Correspondingly, the meanings of price cuts and sale prices vary across store formats. To interpret the findings, we consider the store pricing format distribution across the USA and Canada.
| Original language | English |
|---|---|
| Pages (from-to) | 1173-1203 |
| Number of pages | 31 |
| Journal | Economica |
| Volume | 90 |
| Issue number | 360 |
| DOIs | |
| State | Published - Oct 2023 |
Bibliographical note
Publisher Copyright:© 2023 The Authors. Economica published by John Wiley & Sons Ltd on behalf of London School of Economics and Political Science.
Funding
We thank two anonymous reviewers for constructive comments that led to a significantly improved paper. We very much appreciate the encouragement and guidance of the editor Daniel Gottlieb in the manuscript revision process. We thank the participants of the 2022 annual conference of the Royal Economic Society, and the 2022 Inflation Conference of the International Centre for Economic Analysis, especially Jurek Konieczny, Sebastian Link, Oleksiy Kryvtsov, Teresa Messner and Danila Smirnov, for their helpful comments and suggestions. Ryan Chahrour kindly answered our questions concerning the implementation of his (Chahrour 2011) sales filter. We are grateful to Vinay Kanetkar for sharing with us his data on Canadian retail stores, and to Xiaogong Huang for his assistance with data gathering. We acknowledge the financial support of the SSHRC (Canada) and the IIMF (McMaster University). All errors are ours. We thank two anonymous reviewers for constructive comments that led to a significantly improved paper. We very much appreciate the encouragement and guidance of the editor Daniel Gottlieb in the manuscript revision process. We thank the participants of the 2022 annual conference of the Royal Economic Society, and the 2022 Inflation Conference of the International Centre for Economic Analysis, especially Jurek Konieczny, Sebastian Link, Oleksiy Kryvtsov, Teresa Messner and Danila Smirnov, for their helpful comments and suggestions. Ryan Chahrour kindly answered our questions concerning the implementation of his (Chahrour 2011 ) sales filter. We are grateful to Vinay Kanetkar for sharing with us his data on Canadian retail stores, and to Xiaogong Huang for his assistance with data gathering. We acknowledge the financial support of the SSHRC (Canada) and the IIMF (McMaster University). All errors are ours.
| Funders |
|---|
| McMaster University |
| Social Sciences and Humanities Research Council of Canada |
| Royal Economic Society |
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