Magazine prices revisited
This paper examines price adjustment behaviour in the magazine industry. In a frequently cited study, Cecchetti (1986) constructs a reduced-form (S, s) model for firms. Cecchetti assumes that a firm's pricing rules are fixed for non-overlapping three-year intervals and estimates the model using a conditional logit specification from Chamberlain (1980). The estimates are inconsistent, however, due to the duration-dependent specification of the model. Two alternative specifications are used to obtain consistent estimation. The consistent estimates continue to provide strong evidence in favour of state-dependent pricing models, but only weak evidence on the behaviour of price adjustment costs. Copyright © 2006 John Wiley & Sons, Ltd.
Year of publication: |
2006
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Authors: | Willis, Jonathan L. |
Published in: |
Journal of Applied Econometrics. - John Wiley & Sons, Ltd.. - Vol. 21.2006, 3, p. 337-344
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Publisher: |
John Wiley & Sons, Ltd. |
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