Why Does the Average Price of Tuna Fall During Lent?

34 Pages Posted: 10 Oct 2005 Last revised: 16 Aug 2010

See all articles by Aviv Nevo

Aviv Nevo

Northwestern University - Department of Economics; National Bureau of Economic Research (NBER)

Kostis Hatzitaskos

Cornerstone Research

Date Written: August 2005

Abstract

For many products the average price paid by consumers falls during periods of high demand. We use information from a large supermarket chain to decompose the decrease in the average price into a substitution effect, due to an increase in the share of cheaper products, and a price reduction effect. We find that for almost all the products we study the substitution effect explains a large part of the decrease. We estimate demand for these products and show the price declines are consistent with a change in demand elasticity and the relative demand for different brands. Our findings are less consistent with "loss-leader" models of retail competition.

Suggested Citation

Nevo, Aviv and Hatzitaskos, Kostis, Why Does the Average Price of Tuna Fall During Lent? (August 2005). NBER Working Paper No. w11572. Available at SSRN: https://ssrn.com/abstract=788437

Aviv Nevo (Contact Author)

Northwestern University - Department of Economics ( email )

2003 Sheridan Road
Evanston, IL 60208
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Kostis Hatzitaskos

Cornerstone Research ( email )

Two Embarcadero Center, Fl 20
San Francisco, CA 94111
United States

HOME PAGE: http://https://www.cornerstone.com/Staff/Kostis-Hatzitaskos

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