Macroeconomic Implications of Uniform Pricing
77 Pages Posted: 22 Oct 2019 Last revised: 2 Nov 2019
Date Written: September, 2019
We compile a new database of grocery prices in Argentina. We find uniform pricing both within and across regions—i.e., prices almost do not vary within stores of a chain. In line with uniform pricing, prices in stores of chains operating in one region react to changes in regional employment, while prices in multi-region chains do not. Using a quantitative regional model with multi-region firms and uniform pricing, we find a one-half smaller elasticity of prices to a regional than an aggregate shock. This result highlights that some caution may be necessary when using regional shocks to estimate aggregate elasticities.
Keywords: Uniform Pricing, Price Dispersion, Regional Economics
JEL Classification: D40, E30, L10, R10
Suggested Citation: Suggested Citation