Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/206833
Authors: 
Bergen, Mark
Levy, Daniel
Ray, Sourav
Rubin, Paul H.
Zeliger, Benjamin
Year of Publication: 
2008
Citation: 
[Journal:] Journal of Law and Economics [ISSN:] 1537-5285 [Volume:] 51 [Issue:] 2 [Pages:] 209-250
Abstract: 
Item‐pricing laws (IPLs) require a price tag on every item sold by a retailer. We study IPLs and assess their efficiency by quantifying their costs and comparing them to previously documented benefits. On the cost side, we posit that IPLs should lead to higher prices because they increase the costs of pricing and price adjustment. We test this prediction using data collected from large supermarket chains in the tri‐state area of New York, New Jersey, and Connecticut. We find that IPL store prices are higher by about 20¢–25¢ per item on average. As a control, we use data from stores that use electronic shelf labels and find that their prices fall between IPL and no‐IPL store prices. We compare the costs of IPLs to existing measures of the benefits and find that the costs are an order of magnitude higher than the upper bound of the estimated benefits.
Subjects: 
Item Pricing Law
Cost of Item Pricing Law
Cost of Price Adjustment
Menu Cost
Retail Pricing
JEL: 
K20
L11
L81
E31
Published Version’s DOI: 
Document Type: 
Article
Document Version: 
Accepted Manuscript (Postprint)

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