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Restaurant Prices And The Minimum Wage

Author

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  • Fougere, Denis
  • Gautier, Erwan
  • Le Bihan, Herve

Abstract

We examine the effect of the minimum wage on restaurant prices. For that purpose, we estimate a price rigidity model by exploiting a unique data set of individual price quotes used to calculate the Consumer Price Index in France. We find a positive and signifi cant impact of the minimum wage on prices. We obtain that the effect of the minimum wage on prices is very protracted. The aggregate impact estimated with our model takes more than a year to fully pass through to retail prices.

Suggested Citation

  • Fougere, Denis & Gautier, Erwan & Le Bihan, Herve, 2008. "Restaurant Prices And The Minimum Wage," Working Papers 44084, American Association of Wine Economists.
  • Handle: RePEc:ags:aawewp:44084
    DOI: 10.22004/ag.econ.44084
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    More about this item

    Keywords

    Demand and Price Analysis; Industrial Organization;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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