Markups Across Space and Time / Eric Anderson, Sergio Rebelo, Arlene Wong.

Format:

Book

Author/Creator:

Anderson, Eric.

Contributor:

National Bureau of Economic Research.

Rebelo, Sergio.

Wong, Arlene.

Series:

Working Paper Series (National Bureau of Economic Research) no. w24434.

NBER working paper series no. w24434

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2018.

Summary:

In this paper, we provide direct evidence on the behavior of markups in the retail sector across space and time. Markups are measured using gross margins. We consider three levels of aggregation: the retail sector as a whole, the firm level, and the product level. We find that: (1) markups are relatively stable over time and mildly procyclical; (2) there is large regional dispersion in markups; (3) there is positive cross-sectional correlation between local income and local markups; and (4) differences in markups across regions are explained by differences in assortment within each goods category, not by deviations from uniform pricing. We propose an endogenous assortment model consistent with these facts.

Notes:

Print version record

March 2018.