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Intertemporal Substitution and Storable Products

Author

Listed:
  • Igal Hendel

    (University of Wisconsin, Madison and NBER,)

  • Aviv Nevo

    (University of California, Berkeley and NBER,)

Abstract

Storable products allow consumers to time their purchases to exploit price fluctuations. It has been documented that during promotions consumers buy more. The additional purchases are potentially intended not only for current use, but to be stockpiled for future consumption. This paper discusses the predictions of a consumer inventory model and reviews the available evidence. We then discuss the implications for demand estimation and present estimates of the economic magnitude of the dynamic effect of storability. (JEL: L0, L4, D1, D4) Copyright (c) 2004 The European Economic Association.

Suggested Citation

  • Igal Hendel & Aviv Nevo, 2004. "Intertemporal Substitution and Storable Products," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 536-547, 04/05.
    • Handle: RePEc:tpr:jeurec:v:2:y:2004:i:2-3:p:536-547
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    Citations

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    Cited by:

    1. Pozzi, Andrea, 2013. "E-commerce as a stockpiling technology: Implications for consumer savings," International Journal of Industrial Organization, Elsevier, vol. 31(6), pages 677-689.
    2. Anily, Shoshana & Hassin, Refael, 2013. "Pricing, replenishment, and timing of selling in a market with heterogeneous customers," International Journal of Production Economics, Elsevier, vol. 145(2), pages 672-682.
    3. Aguirregabiria, Victor & Nevo, Aviv, 2010. "Recent developments in empirical IO: dynamic demand and dynamic games," MPRA Paper 27814, University Library of Munich, Germany.
    4. Nathan Marwell & Leslie McGranahan, 2010. "The effect of sales tax holidays on household consumption patterns," Working Paper Series WP-2010-06, Federal Reserve Bank of Chicago.
    5. Borzykowski, Nicolas, 2019. "A supply-demand modeling of the Swiss roundwood market: Actors responsiveness and CO2 implications," Forest Policy and Economics, Elsevier, vol. 102(C), pages 100-113.
    6. Younghyeon Jeon & Hoa Hoang & Wyatt Thompson & David Abler, 2024. "A meta‐analysis of U.S. food demand elasticities to detect the impacts of scanner data," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 46(2), pages 760-780, June.
    7. V. Kerry Smith & Sharon L. Harlan & Michael McLaen & Jacob Fishman & Carlos Valcarcel & Marcia Nation, 2015. "Compassion or Cash: Evaluating Survey Response Incentives and Valuing Public Goods," NBER Working Papers 21288, National Bureau of Economic Research, Inc.
    8. Darryl Biggar & Matthieu Glachant & Magnus Söderberg, 2018. "Monopoly regulation when customers need to make sunk investments: evidence from the Swedish district heating sector," Journal of Regulatory Economics, Springer, vol. 54(1), pages 14-40, August.
    9. Fabio Antoniou & Raffaele Fiocco, 2019. "Strategic inventories under limited commitment," RAND Journal of Economics, RAND Corporation, vol. 50(3), pages 695-729, September.
    10. David B. Cashin, 2017. "The Household Expenditure Response to a Consumption Tax Rate Increase," Finance and Economics Discussion Series 2017-035, Board of Governors of the Federal Reserve System (U.S.).
    11. David Cashin & Takashi Unayama, 2016. "Measuring Intertemporal Substitution in Consumption: Evidence from a VAT Increase in Japan," The Review of Economics and Statistics, MIT Press, vol. 98(2), pages 285-297, May.
    12. Nikolaus Fink, 2016. "Formation and Adaptation of the Sugar Cartel in Austria–Hungary," WIFO Working Papers 508, WIFO.
    13. Borzykowski, Nicolas, 2017. "The Swiss market for construction wood : estimating elasticities with time series simultaneous equations," 91st Annual Conference, April 24-26, 2017, Royal Dublin Society, Dublin, Ireland 258659, Agricultural Economics Society.
    14. David CASHIN & UNAYAMA Takashi, 2011. "The Intertemporal Substitution and Income Effects of a VAT Rate Increase: Evidence from Japan," Discussion papers 11045, Research Institute of Economy, Trade and Industry (RIETI).
    15. Kozo Ueda & Kota Watanabe & Tsutomu Watanabe, 2024. "Household Inventory, Temporary Sales, Price Indices," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 65(1), pages 217-251, February.
    16. J. Michael Collins & Amrita Kulka, 2023. "Saving by buying ahead: stockpiling in response to lump‐sum payments," Fiscal Studies, John Wiley & Sons, vol. 44(4), pages 451-484, December.
    17. Stefano DellaVigna & Ulrike Malmendier, 2006. "Paying Not to Go to the Gym," American Economic Review, American Economic Association, vol. 96(3), pages 694-719, June.
    18. Fabio Antoniou & Raffaele Fiocco, 2023. "Storable Good Market With Intertemporal Cost Variations," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(1), pages 361-385, February.
    19. Coles, Christopher & Mlyavidoga Kilima, Fredy & Mvena, Zebedayo Smawel & Ngetti, Miraji & Akyoo, Adam & Nombo, Carolyne, 2015. "Field assessment of rapid market estimation techniques: a case study of dairy value chains in Tanzania," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 10(3), pages 1-12.

    More about this item

    JEL classification:

    • L0 - Industrial Organization - - General
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • D1 - Microeconomics - - Household Behavior
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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