TY - JOUR
T1 - Sales and consumer inventory
AU - Hendel, Igal
AU - Nevo, Aviv
PY - 2006/3/1
Y1 - 2006/3/1
N2 - Temporary price reductions (sales) are common for many goods and naturally result in a large increase in the quantity sold. We explore whether the data support the hypothesis that these increases are, at least partly, due to demand anticipation: at low prices, consumers store for future consumption. This effect, if present, has broad economic implications. We test the predictions of an inventory model using scanner data with two years of household purchases. The results are consistent with an inventory model and suggest that static demand estimates may overestimate price sensitivity.
AB - Temporary price reductions (sales) are common for many goods and naturally result in a large increase in the quantity sold. We explore whether the data support the hypothesis that these increases are, at least partly, due to demand anticipation: at low prices, consumers store for future consumption. This effect, if present, has broad economic implications. We test the predictions of an inventory model using scanner data with two years of household purchases. The results are consistent with an inventory model and suggest that static demand estimates may overestimate price sensitivity.
UR - http://www.scopus.com/inward/record.url?scp=34248366978&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=34248366978&partnerID=8YFLogxK
U2 - 10.1111/j.1756-2171.2006.tb00030.x
DO - 10.1111/j.1756-2171.2006.tb00030.x
M3 - Article
AN - SCOPUS:34248366978
SN - 0741-6261
VL - 37
SP - 543
EP - 561
JO - RAND Journal of Economics
JF - RAND Journal of Economics
IS - 3
ER -