Price Setting in Chile: Micro Evidence from Consumer On-Line Prices During the Social Outbreak and Covid-19

Abstract

In this paper we analyze the price setting behavior in Chile by using scraped data from public websites of the main retailers including supermarkets, a pharmacy retailer and car dealerships. The data collection started in July 2019 and the dataset covers two major recent events: (1) the social outbreak and (2) the state of emergency declaration due to Covid-19, both episodes led to disruptions in the economy. With information on product varieties that accounts for 22% of the CPI basket, we document several empirical findings as regards price setting behaviour in terms of stickiness, that is, frequency, implied duration and the size of price adjustments. We find that in spite of facing large shocks, prices adjusted very little, at a lower frequency and at a smaller size than prior to these two events. We also find that there was a reduction on product variety availability on-line, a typical feature that also has been found during natural disasters such as earthquakes. The reduction in product availability poses additional difficulties to construct CPI indexes and to properly capture price rigidities, which are relevant for monetary policy. * We are very grateful for useful comments to internal seminar participants, both in BoS and the CBCh, and to participants of the Conference on "Non-traditional data and statistical learning with applications to macroeconomics" organized by the Bank of Italy and the Federal Reserve Board and to Isabel Sánchez García. The views expressed herein are those of the authors and do not necessarily reflect the views of Banco de España nor the Central Bank of Chile.

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Stylized Facts From Prices at Multi-Channel Retailers in Mexico

“…As the retailers in our sample include supermarkets, price clubs and departmental stores, this paper follows the literature by focusing on prices in the goods sector, e.g. Cavallo (2018) and Peña and Prades (2021). 3 Additionally, this paper sheds light on the extent to which the Covid-19 pandemic in 2020 a↵ected price setting behavior in both online and o✏ine channels.…”

“…Second, this study complements the literature on sticky prices using web scraped prices. Papers by Cavallo (2018), Coronado et al (2020) and Peña and Prades (2021) are great references in this field. Cavallo (2018) exhibits the small size in the distribution of web scraped prices changes around zero.…”

“…However, this paper provides evidence that, despite abstracting from imputations and average prices, the distribution of o✏ine price changes still reports a non-negligible size around zero. 10 Moreover, Coronado et al (2020) and Peña and Prades (2021) provide statistics on the frequency of price changes for Peru and Chile, respectively. This paper di↵ers from Coronado et al (2020) in the scope of product categories under study (more than 100 relative to 11 product categories).…”