Targeted Price Controls on Supermarket Products / Diego Aparicio, Alberto Cavallo.

Format:

Book

Author/Creator:

Aparicio, Diego.

Contributor:

National Bureau of Economic Research.

Cavallo, Alberto.

Series:

Working Paper Series (National Bureau of Economic Research) no. w24275.

NBER working paper series no. w24275

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2018.

Summary:

We study the impact of targeted price controls for supermarket products in Argentina from 2007 to 2015. Using web-scraping, we collected daily prices for controlled and non-controlled goods and measured the differential effects on inflation, product availability, and price dispersion. We first show that, although price controls are imposed on goods with significant CPI weight, they have a temporary effect on aggregate inflation and no downward effect on other goods. Second, contrary to common beliefs, we find that controlled goods are consistently available for sale. Third, firms compensate for price controls by introducing new product varieties at higher prices. This behavior, which increases price dispersion within narrow categories, is consistent with a standard vertical differentiation model in the presence of price controls.

Notes:

Print version record

February 2018.