Krzysztof Pytka (Mannheim), 17.05.2023
This paper shows that price dispersion matters for shaping individual household consumption. Using detailed scanner data, I document that the high-earning employees pay from 2 to 7% higher prices than the low-earning ones for exactly the same or very similar goods. The causal link between the income level and paid prices is established by exploiting a quasi-experimental setup of the Economic Stimulus Act of 2008. Between 8 and 22% ofthe increase in household spending after a transitory income shock is explained by positive changes in the paid prices. Next, I present a novel and tractable theory to study search for consumption as part of the optimal savings problem. Due to retail-market frictions, households have to exert search effort to purchase the consumption goods. The proposed framework reconciles the documented patterns in a quantitatively meaningful way. (...)
Time
Wednesday, 17.05.23 - 12:15 PM
- 01:30 PM
Topic
"Shopping Frictions and Household Heterogeneity: Theory and Empirics"
Speaker
tba
Location
Juridicum, Adenauerallee 24-42
Room
Faculty Room
Reservation
not required
Organizer
Institute for Macroeconomics and Econometrics
Contact