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Adoption of the Euro and Catering Industry Prices: The Case of Slovenia

Author

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  • Sergej Gricar

    (University of Primorska, Slovenia)

  • Štefan Bojnec

    (University of Primorska, Slovenia)

Abstract

This paper focuses on the Euro adoption in Slovenia and its transmission to catering industry prices. The empirical approach uses three different methodologies: the principal component analysis, factor analysis and regression analysis on the monthly statistical data collected during the period from 2000 to 2007. In the regression analysis the dependent variable is used as the differential between the catering industry price index and the consumer price index. The regression analysis confirmed that the catering industry price index and the differential of the catering industry price index and the consumer price index, respectively, are positively associated with wages, tourist arrivals, and with the Euro adoption, respectively. The two common components are identified by using the principal component analysis: first, the general level of prices and wages in the catering industry and second, the Euro price adoption and later Euro price stabilization, and demand for catering industry services. We also used factor analysis to check the robustness of the principal component method results.

Suggested Citation

  • Sergej Gricar & Štefan Bojnec, 2012. "Adoption of the Euro and Catering Industry Prices: The Case of Slovenia," Academica Turistica - Tourism and Innovation Journal, University of Primorska Press, vol. 5(1), pages 21-30.
    • Handle: RePEc:prp:jattij:v:5:y:2012:i:1:p:21-30
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    References listed on IDEAS

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    1. Fabiani, Silvia & Stahl, Harald & Kwapil, Claudia & Druant, Martine & Stokman, Ad C.J. & Landau, Bettina & Sabbatini, Roberto & Mathä, Thomas Y. & Loupias, Claire & Hernando, Ignacio & Martins, Fernan, 2005. "The pricing behaviour of firms in the euro area: new survey evidence," Working Paper Series 535, European Central Bank.
    2. Bart Hobijn & Federico Ravenna & Andrea Tambalotti, 2006. "Menu Costs at Work: Restaurant Prices and the Introduction of the Euro," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(3), pages 1103-1131.
    3. Silvia Fabiani & Martine Druant & Ignacio Hernando & Claudia Kwapil & Bettina Landau & Claire Loupias & Fernando Martins & Thomas Mathä & Roberto Sabbatini & Harald Stahl & Ad Stokman, 2006. "What Firms' Surveys Tell Us about Price-Setting Behavior in the Euro Area," International Journal of Central Banking, International Journal of Central Banking, vol. 2(3), September.
    4. Helena Nemec Rudez & Stefan Bojnec, 2008. "Impacts of the Euro on the Slovenian Tourism Industry," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 6(4), pages 445-460.
    5. Sergej Gricar & Stefan Bojnec, 2009. "Catering Industry Prices in Slovenia," Faculty of Management Koper Monograph Series, University of Primorska, Faculty of Management Koper, number 978-961-266-027-7, June.
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