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Wilfrid Laurier University School of Business & Economics
April 18, 2014
 
 
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2003-07 EC: Inflation And Costly Price Adjustment: A Study Of Canadian Newspaper Prices (Working Paper)


Fisher, T.C.G., & Konieczny, J.D.

published: 2003 | Research publication | Working Paper - Economics

ABSTRACT  The paper studies the effect of inflation on price behaviour using price data from Canadian daily newspapers. We test the Sheshinski-Weiss (1977) monopoly price adjustment model on a sample of monopolistic as well as oligopolistic newspapers, in contrast to earlier studies that used data from oligopolistic or monopolistically competitive markets. The results depend crucially on the assumptions about how often the firm collects information and revises its optimal pricing policy. With infrequent policy revisions, the results for monopoly newspapers support the model. The results for oligopoly newspapers are similar. We find that price changes are not small. Our data do not support Kashyap’s (1995) pricing point model.

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revised Dec 1/04

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