Asymmetries in Price‐Setting Behavior: New Microeconometric Evidence from Switzerland

Honoré, Bo E.; Kaufmann, Daniel; Lein, Sarah M.

doi:10.1111/j.1538-4616.2012.00558.x

Cited by 11 publications

(18 citation statements)

References 69 publications

(126 reference statements)

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“…We see that changes in the CPI, WPI and NGDP are quite symmetrically distributed. This supports Honoré et al (2012) who find no relevant downward nominal price rigidities for Switzerland based on CPI micro data. Only the distribution of HWI changes appears to be positively skewed and most of the mass is concentrated in positive territory.…”

Section: Data and Descriptive Statisticssupporting

confidence: 77%

Nominal Stability and Swiss Monetary Regimes Over Two Centuries

Kaufmann

2015

SSRN Journal

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Section: Data and Descriptive Statisticssupporting

confidence: 77%

Nominal Stability and Swiss Monetary Regimes Over Two Centuries

Kaufmann

2015

SSRN Journal

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“…If the threshold does not vary at all, the empirical model would reproduce the predictions of a standard fixed adjustment cost model (for similar empirical models, see Dhyne et al. , Fougere, Gautier, and Bihan , Gautier and Le Bihan , Honore, Kaufmann, and Lein ).…”

Section: Gasoline Price Rigidity: An Empirical Modelmentioning

confidence: 85%

The Dynamics of Gasoline Prices: Evidence from Daily French Micro Data

Gautier¹,

Saout²

2015

J of Money Credit Banking

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Using millions of individual gasoline prices collected at a daily frequency, we examine the speed at which market prices of refined oil are transmitted to retail gasoline prices in France. For that, we estimate a reduced‐form model of state‐dependent pricing where thresholds triggering price changes are allowed to vary over time and depend on the duration since the last price change. We find that the degree of pass‐through of wholesale prices to retail gasoline prices is on average 0.77 for diesel and 0.67 for petrol and depend on local market characteristics. The duration for a shock to be fully transmitted into prices is about 10 days. There is no significant asymmetry in the transmission of wholesale price to retail prices. Finally, the duration since the last price change has a significant effect on thresholds triggering price changes but a large variance of idiosyncratic shocks on thresholds is also crucial to replicate the size distribution of price changes.

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“…Kaufmann (2009) considers a very similar data set to ours and for a broader set of subindices; however, his contribution remains descriptive. Honoré et al (2012) also use data from subindices of the Swiss CPI to investigate the contribution of general inflation to the share of positive price changes in Switzerland. 3 As mentioned above, little is empirically understood about the factors impacting the sizes of price adjustments.…”

Section: Review Of Related Literaturementioning

confidence: 99%

What Determines Price Changes and the Distribution of Prices? Evidence from the Swiss CPI.

Schnell

2015

Heterogeneity in Macroeconomics and Its Implications for Monetary Policy

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This paper examines how firms set and adjust their prices, depending on macroeconomic, sectoral and individual conditions. A large panel of 345,963 observations of quarterly firm and product price data, underlying the Swiss sectoral CPIs from 1993 to 2012, is used for this purpose. The data allows us to trace the pricing decisions of the identified firm over time and in detail (without regular interruption of the price series as in the case of the US CPI). Among several macroeconomic factors, the appreciation of the Swiss franc results in an increase in the probability of a positive price change and, to a lesser extent, in the size of price changes. Singling out one policy measure, we found that an increase in the VAT is over-proportionally shifted to prices by firms who change their prices. Finally, the data set allows for the analysis of the development of price dispersion at the product level. We can demonstrate that an increase in the VAT led to a decrease in the variance in prices, whereas macroeconomic factors have no impact.

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Asymmetries in Price‐Setting Behavior: New Microeconometric Evidence from Switzerland

Cited by 11 publications

References 69 publications

Nominal Stability and Swiss Monetary Regimes Over Two Centuries

Nominal Stability and Swiss Monetary Regimes Over Two Centuries

The Dynamics of Gasoline Prices: Evidence from Daily French Micro Data

What Determines Price Changes and the Distribution of Prices? Evidence from the Swiss CPI.

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