How Do National Firms Respond to Local Cost Shocks?t

• 成果类型: Article
• 署名作者: Butters, R. Andrew; Sacks, Daniel W.; Seo, Boyoung
• 署名单位: Indiana University System; Indiana University Bloomington; IU Kelley School of Business
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20201524
• 发表日期: 2022
• 页码: 1737-1772
• 关键词: pass-through; market power; prices; taxes; state; taxation; demand; COMPETITION; SALIENCE; GOODS

摘要

Recent research shows prices are insensitive to local demand condiWe examine the price response to local cost shocks, including 68 excise tax changes, 76 sales tax changes, and other geographically based cost differences, using data on 35,151 retail stores in 96 multi-state chains. We find local cost shocks are passed through to local prices, with no spillovers to unaffected stores in otherwise affected chains, and at similar rates for national and local chains. Firms adjust local prices according to local cost changes, suggesting retailers respond asymmetrically to local cost and demand shocks.