Heterogeneity in Consumer Price Stickiness: A Microeconometric Investigation

58 Pages Posted: 7 Nov 2010

See all articles by Denis Fougère

Denis Fougère

National Center for Scientific Research (CNRS); CNRS and SCIENCES PO PARIS; IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Hervé le Bihan

Banque de France - Centre de Recherche

Patrick Sevestre

Aix-Marseille University

Multiple version iconThere are 3 versions of this paper

Date Written: November 1, 2005

Abstract

This paper examines heterogeneity in price stickiness using a large, original, set of individual price data collected at the retail level for the computation of the French CPI. To that end, we estimate, at a very high level of disaggregation, competing-risks duration models that distinguish between price increases, price decreases and product replacements. The main .ndings are the following: i) cross-product and cross-outlet-type heterogeneity in both the shape of the hazard function and the impact of covariates is pervasive ii) at the product-outlet type level, the baseline hazard function of a price spell is non-decreasing iii) there is strong evidence of state-dependence, especially for price increases.

JEL Classification: E31, C41

Suggested Citation

Fougere, Denis and Fougere, Denis and Le Bihan, Herve and Sevestre, Patrick, Heterogeneity in Consumer Price Stickiness: A Microeconometric Investigation (November 1, 2005). Banque de France Working Paper No. 137, Available at SSRN: https://ssrn.com/abstract=1703422 or http://dx.doi.org/10.2139/ssrn.1703422

Denis Fougere (Contact Author)

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Herve Le Bihan

Banque de France - Centre de Recherche ( email )

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Patrick Sevestre

Aix-Marseille University ( email )

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