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Targeted price controls on supermarket products

by Aparicio, Diego
Authors: Cavallo, Alberto Series: NBER working paper series . 24275 Published by : NBER (Cambridge) Physical details: 45 p. Subject(s): Supermercados | Mercadorias | Política de preços | EUA Year: 2018
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Item type Location Call number Copy Status Date due
Documento de trabalho Documento de trabalho Instituto Superior de Economia e Gestão
ISEG (iseg)
Serial 155//24275 (Browse shelf) 1 Sem empréstimo

We study the impact of targeted price controls for supermarket products in Argentina from 2007 to 2015. Using web-scraping, we collected daily prices for controlled and non-controlled goods and measured the differential effects on inflation, product availability, and price dispersion. We first show that, although price controls are imposed on goods with significant CPI weight, they have a temporary effect on aggregate inflation and no downward effect on other goods. Second, contrary to common beliefs, we find that controlled goods are consistently available for sale. Third, firms compensate for price controls by introducing new product varieties at higher prices. This behavior, which increases price dispersion within narrow categories, is consistent with a standard vertical differentiation model in the presence of price controls.

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