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Retail Price Setting in Uruguay

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  • Fernando Borraz
  • Leandro Zipitría

Abstract

We analyze the behaviour of prices in Uruguay using a unique database of 30 millions daily prices. We find that prices change about 5 times a year with no seasonal patter. Prices changes are highly synchronised and concentrated on the first day of the month. Our paper is the first to present evidence of high synchronization of prices, which in turn could be explained mainly by the data periodicity. Overall the analysis seems to be consistent with state-dependent pricing models, although we found some interesting features of prices that could not be explained by these models.

Suggested Citation

  • Fernando Borraz & Leandro Zipitría, 2012. "Retail Price Setting in Uruguay," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 77-109, January.
    • Handle: RePEc:col:000425:009967
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    References listed on IDEAS

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    1. Alberto Cavallo, 2018. "Scraped Data and Sticky Prices," The Review of Economics and Statistics, MIT Press, vol. 100(1), pages 105-119, March.
    2. Gastón Chaumont & Miguel Fuentes & Felipe Labbé & Alberto Naudon, 2011. "A Reassessment of Flexible Price Evidence Using Scanner Data: Evidence from an Emerging Economy," Working Papers Central Bank of Chile 641, Central Bank of Chile.
    3. Fisher, Timothy C. G. & Konieczny, Jerzy D., 2000. "Synchronization of price changes by multiproduct firms: evidence from Canadian newspaper prices," Economics Letters, Elsevier, vol. 68(3), pages 271-277, September.
    4. Juan Pablo Medina G. & David Rappoport W. & Claudio Soto G., 2007. "Dynamics of Price Adjustments: Evidence From Micro Level Data For Chile," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 10(2), pages 5-26, August.
    5. Ellis, Colin, 2009. "Do supermarket prices change from week to week?," Bank of England working papers 378, Bank of England.
    6. Emi Nakamura & Jón Steinsson, 2008. "Five Facts about Prices: A Reevaluation of Menu Cost Models," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(4), pages 1415-1464.
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    Citations

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    Cited by:

    1. Fernando Borraz & Alberto Cavallo & Roberto Rigobon & Leandro Zipitria, 2016. "Distance and Political Boundaries: Estimating Border Effects under Inequality Constraints," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 21(1), pages 3-35, January.
    2. Emilio Aguirre & Pablo Blanchard & Fernando Borraz & Joaquín Saldain, 2022. "Prices and competition: evidence from a social program," International Review of Applied Economics, Taylor & Francis Journals, vol. 36(1), pages 85-101, January.
    3. Fernando Borraz & Leandro Zipitría, 2016. "Law of One Price, Distance, and Borders," Documentos de trabajo 2016007, Banco Central del Uruguay.
    4. Frache, Serafin & Lluberas, Rodrigo & Turen, Javier, 2024. "Belief-dependent pricing decisions," Economic Modelling, Elsevier, vol. 132(C).
    5. Daniel Czarnievicz & Leandro Zipitría, 2018. "Concentración y precios en cinco mercados minoristas," Documentos de Trabajo (working papers) 0618, Department of Economics - dECON.
    6. Fernando Borraz & Gerardo Licandro & Daniela Sola, 2020. "Wage and price setting: new evidence from Uruguayan firms," Journal of Applied Economics, Taylor & Francis Journals, vol. 23(1), pages 560-582, January.
    7. Kochen Federico, 2016. "Price-Setting in Mexico and the Real Effects of Monetary Shocks," Working Papers 2016-21, Banco de México.
    8. Zipitría, Leandro & Rius, Andrés, 2016. "Formación y determinación de precios en el Uruguay," Estudios y Perspectivas – Oficina de la CEPAL en Montevideo 39864, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    9. Klaczko Iael, 2023. "Price dispersion in Uruguay," Asociación Argentina de Economía Política: Working Papers 4662, Asociación Argentina de Economía Política.
    10. Fernando Borraz & Joaquín Saldain, 2017. "Variance Decomposition of Prices in an Emerging Economy," Monetaria, Centro de Estudios Monetarios Latinoamericanos, CEMLA, vol. 0(2), pages 243-269, July-Dece.

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    More about this item

    Keywords

    Uruguay; behaviour; prices; seasonal pattern; synchronization; periodicity;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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