A Sticky-Price View of Hoarding

Kilts Center for Marketing at Chicago Booth – Nielsen Dataset Paper Series 1-050

60 Pages Posted: 21 Nov 2014 Last revised: 19 Jun 2023

See all articles by Christopher Hansman

Christopher Hansman

Imperial College Business School

Harrison G. Hong

Columbia University, Graduate School of Arts and Sciences, Department of Economics; National Bureau of Economic Research (NBER)

Aureo de Paula

University College London - Department of Economics

Vishal Singh

New York University (NYU) - Department of Marketing

Multiple version iconThere are 4 versions of this paper

Date Written: June 17, 2023

Abstract

Hoarding disrupts the functioning of markets. Yet little is known about its determinants. We analyze major recent hoarding episodes through the lens of an optimal inventory model in which risk-averse agents hoard both as a precautionary hedge against price uncertainty and to speculate when prices are predictable. Using supermarket scanner data, we provide reduced-form evidence of the importance of the speculative motive due to sticky retail prices. We use our model to quantify that speculation accounts for a meaningful fraction of overall hoarding, although smaller than precaution in our episodes.

Keywords: Retail Hoarding, Sticky Prices, Precaution, Inventory, Rice, Forecast Tests

JEL Classification: Q11, G00

Suggested Citation

Hansman, Christopher and Hong, Harrison G. and de Paula, Aureo and Singh, Vishal, A Sticky-Price View of Hoarding (June 17, 2023). Kilts Center for Marketing at Chicago Booth – Nielsen Dataset Paper Series 1-050, Available at SSRN: https://ssrn.com/abstract=2528080 or http://dx.doi.org/10.2139/ssrn.2528080

Christopher Hansman

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

HOME PAGE: http://chrishansman.com/

Harrison G. Hong (Contact Author)

Columbia University, Graduate School of Arts and Sciences, Department of Economics ( email )

420 W. 118th Street
New York, NY 10027
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Aureo De Paula

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom

Vishal Singh

New York University (NYU) - Department of Marketing ( email )

Henry Kaufman Ctr
44 W 4 St.
New York, NY
United States

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