The magnitude of menu costs: Direct evidence from large US supermarket chains

• 成果类型: Article
• 署名作者: Levy, D; Bergen, M; Dutta, S; Venable, R
• 署名单位: University of Minnesota System; University of Minnesota Twin Cities; University of Southern California
• 刊物名称: QUARTERLY JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0033-5533
• DOI: 10.1162/003355397555352
• 发表日期: 1997
• 页码: 791-825
• 关键词: price adjustment; sticky prices; inflation; money; COMPETITION; ECONOMICS; output; MODEL

摘要

We use store-level data to document the exact process of changing prices and to directly measure menu costs at five multistore supermarket chains. We show that changing prices in these establishments is a complex process, requiring dozens of steps and a nontrivial amount of resources. The menu costs average $105,887/year per store, comprising 0.70 percent of revenues, 35.2 percent of net margins, and $0.52/price change. These menu costs may be forming a barrier to price changes. Specifically, (1) a supermarket chain facing higher menu costs (due to item pricing laws that require a separate price tag on each item) changes prices two and one-half times less frequently than the other four chains; (2) within this chain the prices of products exempt from the law are changed over three times more frequently than the products subject to the law.