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Retail Food Store Inventory Behavior

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  • Miller, Stephen E.

Abstract

A stock-adjustment model is applied to monthly retail food store inventory data from 1968 through 1988. Estimates of the speed-of-adjustment coefficient (.34 to .75) are higher than estimates from previous research, indicating that periods of inventory disequilibrium in food retailing are short-lived. The results indicate that inventories are insensitive to financial carrying costs. The hypothesis that parameters of the model are constant over the sample period cannot be rejected, indicating that changes in food retailing (e.g., electronic scanning and diversification of product mixes) have not affected inventory behavior.

Suggested Citation

  • Miller, Stephen E., 1990. "Retail Food Store Inventory Behavior," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 15(1), pages 1-11, July.
    • Handle: RePEc:ags:wjagec:32491
    DOI: 10.22004/ag.econ.32491
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    References listed on IDEAS

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    1. Miron, Jeffrey A & Zeldes, Stephen P, 1988. "Seasonality, Cost Shocks, and the Production Smoothing Models of Inventories," Econometrica, Econometric Society, vol. 56(4), pages 877-908, July.
    2. Trivedi, P. K., 1973. "Retail inventory investment behaviour," Journal of Econometrics, Elsevier, vol. 1(1), pages 61-80, March.
    3. Martin Feldstein & Alan Auerbach, 1976. "Inventory Behavior in Durable-Goods Manufacturing: The Target-Adjustment Model," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 7(2), pages 351-408.
    4. Farley, John U. & Hinich, Melvin & McGuire, Timothy W., 1975. "Some comparisons of tests for a shift in the slopes of a multivariate linear time series model," Journal of Econometrics, Elsevier, vol. 3(3), pages 297-318, August.
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    Cited by:

    1. Howard Doran, 1993. "Testing Nonnested Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(1), pages 95-103.

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