Data Aggregation and Vertical Price Transmission: An Experiment with German Food Prices

The impact of cross sectional aggregation over individual retail stores on the estimation and testing of vertical price transmission between the wholesale and retail levels is investigated using a unique data set of individual retail prices in Germany. Systematic differences between the results of estimations using aggregated data on the one hand, and disaggregated data on the other, are discussed theoretically and confirmed empirically. The results suggest that estimation with aggregated data generates misleading conclusions about price transmission behavior at the level of the individual units (i.e. retail stores) that underlie these aggregates.


Issue Date:
2006
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/25291
Total Pages:
16
JEL Codes:
L11; D40
Series Statement:
Contributed Paper




 Record created 2017-04-01, last modified 2017-04-26

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