Price Points And Price Rigidity

Daniel Levy, Dongwon Lee, Haipeng Allan Chen, Robert J. Kauffman, Mark Bergen

Research output: Contribution to journalArticlepeer-review

26 Scopus citations

Abstract

We study the link between price points and price rigidity using two data sets: weekly scanner data and Internet data. We find that "9" is the most frequent ending for the penny, dime, dollar, and ten-dollar digits; the most common price changes are those that keep the price endings at "9"; 9-ending prices are less likely to change than non-9-ending prices; and the average size of price change is larger for 9-ending than non-9- ending prices. We conclude that 9-ending contributes to price rigidity from penny to dollar digits and across a wide range of product categories, retail formats, and retailers.

Original languageEnglish (US)
Pages (from-to)1417-1431
Number of pages15
JournalReview of Economics and Statistics
Volume93
Issue number4
DOIs
StatePublished - Nov 2011

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