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on Microeconomic European Issues |
| By: | Prantl, Susanne; Spitz-Oener, Alexandra (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "Does interacting product and labor market regulation alter the impact of immigration on wages of competing native workers? Focusing on the large, sudden and unanticipated wave of migration from East to West Germany after German reunification and allowing for endogenous immigration, we compare native wage reactions across different segments of the West German labor market: one segment without product and labor market regulation, to which standard immigration models best apply, one segment in which product and labor market regulation interact, and one segment covering intermediate groups of workers. We find that the wages of competing native West Germans respond negatively to the large influx of similar East German workers in the segment with almost free firm entry into product markets and weak worker influence on the decision-making of firms. Competing native workers are insulated from such pressure if firm entry regulation interacts with labor market institutions, implying a strong influence of workers on the decision-making of profit-making firms." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Gütermarkt, Arbeitsmarkt, Regulierung, Binnenwanderung, Arbeitsmigration, institutionelle Faktoren, staatlicher Zusammenschluss, Handwerk, Handwerksordnung, Betriebsrat, Betriebsverfassungsgesetz, Arbeitsmarktentwicklung, regionaler Arbeitsmarkt, Einwanderung - Auswirkungen, Einkommenseffekte, Inländer, Westdeutschland, Ostdeutschland |
| JEL: | J61 L50 J3 |
| Date: | 2014–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201404&r=eur |
| By: | Peter Heindl |
| Abstract: | Fuel poverty measurement consists of two independent parts: firstly, the definition of an adequate fuel poverty line, and secondly, techniques to measure fuel poverty. This paper reviews options for the definition of fuel poverty lines and techniques for fuel poverty measurement. Based on household data from Germany, figures that would result from different fuel poverty lines are derived. Different fuel poverty lines yield highly different results with respect to which households are identified as fuel poor. Thus, the choice of the fuel poverty line matters decisively for the resulting assessment. Options for fuel poverty measurement and subgroup comparison are discussed. |
| Keywords: | Fuel poverty, energy poverty, poverty measurement, Energiearmut, Germany |
| JEL: | I32 Q28 Q48 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp632&r=eur |
| By: | Vassilis Monastiriotis |
| Abstract: | The process of approximation between the EU and its ‘eastern neighbourhood’ has created conditions for deepening economic interactions and market integration, giving to the EU – and to EU businesses– an elevated role in the process of economic modernisation and transition in the neighbourhood countries. This raises the question as to whether European business activity in these countries produces indeed measureable economic advantages both in absolute and in relative terms (e.g., compared to business activity from other parts of the world). Similarly, a question arises as to whether European business activity reduces or amplifies spatial imbalances within the partner countries. This paper examines these issues for the case of capital flows (foreign ownership) and the related productivity spillovers, using firm-level data from the Business Environment and Enterprise Performance Survey (BEEPS)covering 28 transition countries over the period 2002-2009. We estimate the direct and intraindustry productivity effects of foreign ownership and examine how these differ across regional blocks (CEE, SEE and ENP), according to the origin of the foreign investor (EU versus non-EU), across geographical scales (pure industry versus regional spillovers) and for different types of locations (capital-city regions versus the rest). Our results suggest that FDI of EU origin plays a distinctive role in the countries concerned helping raise domestic productivity significantly more than investments from outside the EU. However, this process appears to operate in a spatially selective manner, thus enhancing regional disparities and spatial imbalances. This, then, assigns a particular responsibility for EU policy, as it continues to promote economic integration (and FDI flows) to its eastern neighbourhood, to devise interventions that will help redress these problems. |
| JEL: | N0 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:55267&r=eur |
| By: | Carsten Gerner-Beuerle; Edmund-Philipp Schuster |
| Abstract: | Corporate mobility and choice of law within the EU has dominated much of the academic writing in European company law over the last decades. What has not yet received much attention is the way in which national company law interacts with and depends on features of the national legal system outside of company law. In this article we explore this interaction and its relevance for coherent national regulatory systems. Using the regulatory framework for companies in the ‘vicinity of insolvency’ as an example, we show how choice of company law can create both regulatory gaps and multiplication of legal requirements, as private international law rules are applied inconsistently across Europe. More importantly, however, we show that even consistent application of conflicts rules would fail to resolve these problems due to cross-doctrinal interdependence within any national legal system. We conclude that this is a design flaw in the way EU law deals with the increasingly international reach of corporations, and discuss possible paths for resolving or mitigating this issue. |
| JEL: | L81 F3 G3 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:55829&r=eur |
| By: | Luisa Alamá-Sabater (Department of Economics and IIDL, Universitat Jaume I, Castellón, Spain); Maite Alguacil (Department of Economics and IEI, Universitat Jaume I, Castellón, Spain); Joan Serafí Bernat-Martí (Department of Economics, Universitat Jaume I, Castellón, Spain) |
| Abstract: | Traditionally, Spain has been a destination for people coming from rich European countries. However, at the end of the last century, the pattern of these immigrant flows changed. The Spanish economic growth model, based on the construction industry, attracted large numbers of immigrants motivated by employment opportunities rather than by the climate conditions. In this article, we analyze the determinants that lead immigrants to move to a particular Spanish province, considering the economic and geographical differences across alternative destinations. We study this question empirically through the estimation of account models for panel data, covering the period 1998-2011. Our findings confirm the initial hypothesis that agglomeration and congestion economic forces play an important role in explaining the location decision of immigrant flows in Spanish provinces. They also reveal the importance of other regional factors, such as the productive structure of the territory, the labor market situation and the urban nature of the region. This result holds even after controlling for the specific, fixed or random, province factors. |
| Keywords: | migration flows, networks effects; migration flows, networks effects, account models |
| JEL: | R23 F22 C25 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:jau:wpaper:2014/07&r=eur |
| By: | Abolhosseini, Shahrouz (Seoul National University); Heshmati, Almas (Sogang University); Altmann, Jörn (Seoul National University) |
| Abstract: | The increased concerns about climate change have made renewable energy sources an important topic of research. Several scholars have applied different methodologies to examine the relationships between energy consumption and economic growth of individual and groups of countries and to analyze the environmental effects of energy policies. Previous studies have analyzed carbon emission savings, using renewable energy usage as an individual source or in combination with traditional sources of energy (e.g., hybrid plants) in connection with lifecycle analysis methods. It is shown that after a certain period, economic growth leads to the promotion of environmental quality. However, econometric modelling critiques have opposed the results of these studies. One reason is that the effectiveness of governance-related parameters has previously been neglected. In this research, we analyze the impact of renewable energy development on carbon emission reduction. We estimate a model to evaluate the effectiveness of renewable energy development, technological innovation, and market regulations in carbon emission reduction. The empirical results are based on a panel data estimation using the EU-15 countries data observed from 1995 to 2010. The elasticities of CO2 emissions are estimated, in order to evaluate the effectiveness of each parameter. The findings show that the effects of a negative climate change could be mitigated by governance-related parameters instead of economic development. |
| Keywords: | renewable energy, technological innovation, environmental tax, carbon emission, economic growth |
| JEL: | D62 H23 N50 O13 O14 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7989&r=eur |
| By: | Fackler, Daniel |
| Abstract: | Using a large administrative dataset and methods of survival analysis, I analyze for the period 1994-2008 whether new establishments' survival chances differ between East and West Germany and whether they converged over time. I find that new establishments in East Germany had relatively good survival chances between 1994 and 1997, with no big differences between East and West Germany. In 1998 and 1999 the exit hazard increased strongly in East but not in West Germany, which is likely to be due to a change in the subsidy policy affecting East Germany. Since 2000 the difference in establishments' exit hazard between East and West Germany has become smaller and towards the end of the observation period it is not statistically significant anymore. -- Anhand umfangreicher administrativer Daten untersucht diese Studie für die Jahre 1994 bis 2008 mit Methoden der Verweildaueranalyse, ob sich die Überlebenschancen neu gegründeter Betriebe zwischen West- und Ostdeutschland unterscheiden und ob sie sich im Zeitablauf angenähert haben. Die Ergebnisse zeigen, dass Betriebe in Ostdeutschland von 1994 bis 1997 relativ gute Überlebenschancen aufweisen, die sich kaum von denen westdeutscher Betriebe unterscheiden. In den Jahren 1998 und 1999 steigt die Schließungswahrscheinlichkeit in Ostdeutschland stark an, in Westdeutschland jedoch nicht, was vermutlich auf eine Änderung der Subventionspolitik für Betriebe in Ostdeutschland zurückzuführen ist. Seit dem Jahr 2000 haben sich die Schließungswahrscheinlichkeiten von Betrieben in West- und Ostdeutschland angenähert und unterscheiden sich gegen Ende des Beobachtungszeitraums nicht mehr signifikant voneinander. |
| Keywords: | startups,firm exits,East Germany |
| JEL: | L2 D22 M13 P27 C41 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:faulre:90&r=eur |
| By: | Roberto Antonietti (Department of Economics and Management “Marco Fanno”, Italy) |
| Abstract: | The aim of this paper is to provide firm-level evidence on the short-run link between outsourcing and labor productivity using an original dataset of Italian manufacturing firms, and applying a two-stage probit least squares estimator. We find a positive effect on productivity from outsourcing only if firms provide training for the workforce. This indirect impact on productivity is independent of the type of activity outsourced and is bigger in the case of service outsourcing. This can be explained by the different feedback effect of labor productivity on training and by the different type of training provided. While production outsourcing induces an organizational change which stimulates off-the-job training for plant operators, service outsourcing induces firms to train a broader range of occupational profiles - both off and on the job. Similar results emerge for the case of joint outsourcing of both production and service activities. Therefore, we find that outsourcing generates positive productivity effects only if it is part of a broader knowledge management strategy that involves upgrading of workers’ skills. |
| Keywords: | Outsourcing, Productivity, Training, Two-Stage Probit Least Squares |
| JEL: | J24 L24 L25 L60 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2014.12&r=eur |
| By: | Panos Kasteridis (Centre for Health Economics, University of York, UK); Andrew Street (Centre for Health Economics, University of York, UK); Matthew Dolman (Somerset Clinical Commissioning Group); Lesley Gallier (South West Commissioning Support); Kevin Hudson (South West Commissioning Support); Jeremy Martin (The Symphony Project); Ian Wyer (South Somerset Healthcare Federation) |
| Abstract: | Aims - Since the inception of the NHS, an ever-present challenge has been to improve integration of care within the health care system and with social care. Many people have complex and ongoing care needs and require support from multiple agencies and various professionals. But care is often fragmented and uncoordinated, with no one agency taking overall responsibility, so it is often left to individuals and their families to negotiate the system as best they can. South Somerset’s Symphony is designed to establish greater collaboration between primary, community, acute and social care, particularly for people with complex conditions. Methods - We examine patterns of health and social care utilisation and costs for the local population to identify which groups of people would most benefit from better integrated care. We analyse data to identify groups of people according to the frequency of occurrence of underlying conditions; the cost of care; and utilisation of services across diverse settings. The empirical identification strategy is supplemented by local intelligence gained through workshops with health and social care professionals about the appropriateness of existing patterns of provision. We employ two-part regression models to explain variability in individual health and social costs, in total and in each setting. Data - The Symphony Project has an anonymised individual-level dataset, spanning primary, community, acute, mental health and social care. This includes activity, costs, clinical conditions, age, sex and ward of residence for the entire population of 114,874 people in 2012. Each person’s morbidity profile is described using the United Health’s Episode Treatment Groups (ETG), which build upon ICD and Read codes. Results - We identify the frequency of conditions and co-morbidity profile of the entire population and, for the most frequent conditions, we assess utilization and costs of care across health and social care settings. For example, for those with asthma and diabetes, hospital costs account for the largest proportion of costs; in contrast, costs for those with dementia occur mostly in social care, mental health care and community care settings. For the population as a whole, we find that costs of health and social care are driven more by an individual’s morbidity profile than by their age. Data for those with the most frequent conditions were reviewed by local health and social care professionals and managers. It was decided to undertake more detailed analyses for those with diabetes or dementia. 5,676 people are recorded as having diabetes in South Somerset, with hypertension being the most common comorbidity. For those with a sole diagnosis of diabetes, costs are around £1,000 on average but as people are recorded as having more diagnoses, average costs increase progressively. Costs are also higher for older people and women. People with dementia account for only 0.92% of the South Somerset population, but the average annual cost for the 1,062 people with dementia is around £12,000. A high proportion of these costs are related to the provision of mental health, social and continuing care. Costs are higher the more co-morbidities a person has, and for people from more deprived areas. Age and gender do not explain variation in costs for people with dementia. Conclusions - This work forms a basis for identifying groups that would most benefit from improved integrated care, which might be facilitated by integrated financial arrangements and better pathway management. The more co-morbidities that a person has, the more likely they are to require care across diverse settings, and the higher their costs. Our analysis identifies those groups of the population which are the highest users of services by activity and cost and provides baseline information to allow budgetary arrangements to be developed for these targeted groups. |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:chy:respap:96cherp&r=eur |
| By: | O.A. Carboni; P. Russu |
| Abstract: | Economic and environmental efficiency has being receiving growing attention among researchers. In general terms, this concept is related to the capability of the economic systems to employ natural resources efficiently, so as to increase economic and human wealth. This clearly implies that both the economic and ecological aspects of decisions ought to be considered. Bearing this in mind, this paper considers economic and ecological performance together, by applying data envelopment analysis (DEA) and the Malmquist productivity index (MPI) to investigating the efficiency of the 20 Italian regions from 2004 to 2011. The results reveal that the northern regions have been more efficient than the southern ones, highlighting the strong geographical differences between the two. Furthemore this paper uses the Grey System Theory to forecast regional economic and environmental efficiency. The results of the forecasting analysis show that the North-south duality remains strong and will possibly increase since the regions in the south get worse in term of environmental and economic efficiency. |
| Keywords: | panel data, forecasting, Data envelopment analysis (DEA), Malmquist productivity index (MPI), Grey system theory |
| JEL: | E17 C61 C23 C14 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201401&r=eur |
| By: | Pilar García-Gómez; Christina Hernandez-Quevedo; Dolores Jiménez-Rubio; Juan Oliva |
| Abstract: | International studies have shown evidence on inequity in use of health services of different kinds, depending on the type of health care service analysed. However, equity in the access to long-term care (LTC) services has received much less attention. We investigate the determinants of several LTC services and the existence of unmet need by the disabled population using unique data from a survey conducted on the disabled population in Spain in 2008. We further measure the level of horizontal inequity using methods based on the Concentration Index, a widely used indicator of income-related inequality in health. At the time of the analysis, only those respondents with the highest dependency level were covered by the recently introduced universal LTC system, which allows us to explore whether inequities remain for this subgroup of the population. In addition, we compare results using self-reported versus a more objective indicator of unmet needs. Evidence suggests that after controlling for a wide set of need variables, there is not an equitable distribution of use and unmet need of LTC services in Spain, with socioeconomic status being an important factor in access to LTC. We find that individuals at the higher end of the income distribution utilize a relatively larger share of formal services (provided by a professional), while intensive informal care (provided by friends and family) is concentrated among the worst-off. In terms of unmet needs for LTC services, their distribution depends on the service considered as well as on whether we focus on subjective or objective measures. Interestingly, for the population covered by the new universal LTC system, inequities in most LTC services and unmet needs remain statistically significant and even increase for certain services, in particular, formal services provided by professionals. |
| Keywords: | disability; equity in utilisation; dependency; long-term care; unmet needs; Spain |
| JEL: | N0 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:55429&r=eur |
| By: | Renneboog, L.D.R.; Spaenjers, C. (Tilburg University, Center for Economic Research) |
| Abstract: | Abstract: Works of art are neither easily tradable across borders, nor evaluated according to globally identical standards. We examine geographical segmentation and its effects on price formation and returns in the international art auction market. We find (i) a close connection between the country of sale and the type (e.g., nationality) of artworks sold; (ii) substantial international variation in average returns to art investments over the period 1971-2007; (iii) an impact of both global and local GDP growth and equity returns on national art market returns. Local fundamentals have not lost importance over time, despite increased economic integration (especially between the EU countries). Yet, country-specific economic factors matter less in determining the auction outcomes for high-end art. Our findings suggest the continuing importance of international demand differences in shaping the global art market, at least outside the top segment. |
| Keywords: | Economics of art;art markets;home bias;geographical market segmentation;art auctions;hedonic regression |
| JEL: | Z11 G15 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2014018&r=eur |
| By: | Neil Lee; Paul Sissons; Ceri Hughes; Anne Green; Gaby Atfield; Duncan Adam; Andrés Rodríguez-Pose |
| Abstract: | Cities are drivers of economic growth, but how does growth affect poverty? This report explores the connection between growth and poverty in UK cities, and examines how strategies for economic growth and poverty reduction can be aligned. The report finds that: - There is no guarantee that economic growth will reduce poverty – in some economically expanding cities poverty has stayed the same or increased; - Employment growth has the greatest impact on poverty, but if jobs are low-paid or go to workers living outside the area, the impact is minimal; - Increased output risks worsening poverty because it can lead to increases in the cost of living; - Some cities are tackling this by promoting employment in expanding sectors or providing training for disadvantaged groups so they can access opportunities associated with major infrastructure projects. |
| JEL: | N0 R14 J01 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:55799&r=eur |
| By: | Tano, Sofia (Department of Economics, Umeå School of Business and Economics) |
| Abstract: | The present paper estimates the relationship between migration across labour-market regions and the subsequent changes in earnings in Sweden by using the individual’s grade point average (GPA) from the final year of comprehensive school as a proxy for ability. This measure aims to capture heterogeneity in the effects of mobility on earnings for individuals conditional on educational attainment and other observed traits. Register data from Sweden, including two whole cohorts of individuals, is used. A difference-in-difference propensity score matching estimator is applied to estimate the relationship between income and migration up to seven years after migrating. The results show variation between different ability groups with respect to the return to regional migration. There are indications of larger gains for individuals holding top grades, while the bottom half seems to benefit less, or have slightly negative returns. The difference in return to migration across GPA quartiles is larger for women than for men. |
| Keywords: | Human capital; income; internal migration; propensity score matching |
| JEL: | J24 J31 J61 R23 |
| Date: | 2014–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0880&r=eur |
| By: | Gundi Knies; Alita Nandi; Lucinda Platt |
| Abstract: | Using a rich, nationally representative data set with a large sample of minorities and matched small area characteristics, we explore differences in life satisfaction for ethnic groups living in UK. We test the hypothesis that minorities will be less satisfied, which will in part be explained by less favourable individual and area contexts, but that living in areas with a larger proportion of own ethnic group promotes well-being. We find that satisfaction is lower among minorities, ceteris paribus, but area concentration is associated with higher life satisfaction for certain groups. We discuss the implications of our findings. |
| Keywords: | life satisfaction; happiness; ethnic group; neighbourhood; subjective wellbeing; UKHLS |
| JEL: | I31 J15 O15 R23 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:55669&r=eur |
| By: | Floro Ernesto Caroleo (University of Naples "Parthenope”, IZA); Francesco Pastore (Seconda Università di Napoli, IZA) |
| Abstract: | This paper provides the first available evidence on overeducation/overskilling based on AlmaLaurea data. We focus on jobs held 5 years after graduation by pre-reform graduates in 2005. Overeducation/overskilling are relatively high – at 11.4 and 8% – when compared to EU economies. Ceteris paribus they tend to be more frequent among children of parents with lower educational levels, through school tracking. Most arts degrees and social sciences, but also Geology and Biology are associated to both types of the educational mismatch. The quality of education is also a factor, suggesting that in addition to the low demand for skills, one should also reckon the inability of the educational system to provide work-related skills. Moreover, we find a non-conditional wage penalty of 20% and 16% and a conditional one of about 12% and of 7%, respectively. Heckit returns a sample selection corrected penalty slightly higher, supporting not only the job competition and job assignment models, but also the human capital model. |
| Keywords: | University-to-Work Transition; Overeducation; Overskilling; Sample Selection Bias; AlmaLaurea; Italy. |
| JEL: | C25 C26 C33 I2 J13 J24 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:laa:wpaper:58&r=eur |
| By: | The Consortium consisting of Ramboll Management Consulting, The Evaluation Partnership and Europe Economic Research |
| Abstract: | This study reviews, assesses and compares twelve methodologies which can be used for measuring compliance costs of taxation. These methodologies are: the Standard Cost Model (SCM), Paying Taxes, the Taxpayer/Business Burden Model, the Total Cost of Regulation to Business (TCR), the Scanning Instrument Regulations of Other Compliance Costs (SIROCCO), the Regulatory Check-up Model (RCM), Guidelines on the Identification and Presentation of Compliance Costs in Legislative Proposals by the Federal Government (GIPCC), the Cost-Driven Approach to Regulatory Burden (CAR), the Complexity Index of the UK Office of Tax Simplification, the Total Cost to Serve (TCS), the Tax Information and Impact Note (TIIN), and the Bureaucracy Cost Index (BKI). |
| Keywords: | European Union, taxation, tax compliance costs |
| JEL: | H20 H29 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:tax:taxpap:0040&r=eur |
| By: | Ibrahim Fatnassi; Zied Ftiti; Habib Hasnaoui |
| Abstract: | We analyze the reactions of the returns of four European stock markets to sovereign credit rating changes by Fitch, Moody’s, and Standard and Poor’s (S&P) during the period from June 2008 to June 2012 using panel regression equations. We find that (i) upgrades and downgrades affect both own country returns and other countries’ returns, (ii) market reactions to foreign downgrades are stronger during the sovereign debt crisis period, and (iii) negative news from rating agencies are more informative than positive news. |
| Keywords: | Sovereign credit rating, Stock Markets, reaction, upgrades, downgrades |
| JEL: | F3 G14 G15 |
| Date: | 2014–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-111&r=eur |
| By: | Rolf Aaberge; Magne Mogstad (Statistics Norway) |
| Abstract: | Do market-orientated economies with relatively large cross-sectional levels of inequality have higher income mobility and therefore less permanent inequality? To answer this question, we introduce a formal representation of income mobility as an equalizer of permanent income. The proposed representation is called a mobility curve and forms the basis for comparison of income distributions according to income mobility. The mobility curve captures the extent to which the distribution of permanent income is equalized because of changes in individuals’ relative income over time. From the derivative of the mobility curve, we can assess the equalizing effect of income mobility in the lower, middle and upper part of the distribution of permanent income. The mobility curve allows us to develop dominance criteria that provide partial orderings of income distributions according to income mobility. We obtain complete orderings through an axiomatically justified family of rank-dependent measures of income mobility, which summarizes the informational content of the mobility curve. We illustrate the usefulness of these methods by re-examining previous findings of income mobility across countries. In contrast to the conclusions in previous studies, we find that changes in relative income over time contribute more (as much) to equality in permanent income in the US as in the Nordic countries and Germany. |
| Keywords: | Inequality; Mobility; Permanent income; Social welfare; Rank-dependent measures |
| JEL: | D31 D63 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:769&r=eur |
| By: | Dixon, Huw (Cardiff Business School); Seaton, Jonathan (Loughborough University); Waterson, Michael (Department of Economics, University of Warwick) |
| Abstract: | This paper delivers a significantly different empirical perspective on micro pricing behaviour and its impact on macroeconomic processes than previous studies, largely resulting from the fact that our weekly price data for the three major British supermarkets spans a seven year period including the crisis years 2008-2010. We find that there is a large and significant change in the behaviour of prices from 2008 onwards: prices change more frequently and the average duration of price spells declines significantly. Several of our findings run strongly counter to established empirical regularities, in particular the high overall frequency of regular or reference price changes we uncover, the greater intensity of change in more turbulent times and the numerical dominance of price falls over rises. The pricing behaviour revealed also significantly challenges the implicit assumption that prices are tracking cost changes. Key words: Micro pricing ; price flexibility ; regular prices ; menu costs JEL classification: E30 ; E31 ; L81 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1041&r=eur |