Arbeitspapier
Consumer price behaviour in Luxembourg: evidence from micro CPI data
This paper uses micro-level price data and analyses the behaviour of consumer prices in Luxembourg. We find that the median duration of consumer prices is roughly 8 months. The median durations of energy and unprocessed food are about 1.5 and 5 months, while prices of services typically change fewer than once a year. For some product types, such as non-energy industrial goods and processed food, a relatively large share of the observed price changes is reverted afterwards. With the exception of services, individual prices do not show signs of downward rigidity. On average, price decreases are as large as price increases. Price changes are determined both by state- and time-dependent factors. Accumulated price and wage inflation, wage adjustment due to indexation, the cash changeover and a larger number of competitors increase the probability of a price change, while pricing at attractive pricing points and price regulation have the opposite effect.
- Language
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Englisch
- Bibliographic citation
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Series: ECB Working Paper ; No. 541
Price Level; Inflation; Deflation
Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
Duration Analysis; Optimal Timing Strategies
price setting
rigidity
sales
wage indexation
Konsumentenverhalten
Verbraucherpreisindex
Luxemburg
Mathä, Thomas Y.
- Handle
- Last update
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20.09.2024, 8:25 AM CEST
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Lünnemann, Patrick
- Mathä, Thomas Y.
- European Central Bank (ECB)
Time of origin
- 2005