Levy, Daniel Lee, Dongwon Chen, Haipeng (Allan) Kauffman, Robert J. Bergen, Mark
Year of Publication:
[Journal:] Review of Economics and Statistics [ISSN:] 1530-9142 [Volume:] 93 [Issue:] 4 [Pages:] 1417-1431
We study the link between price points and price rigidity using two data sets: weekly scanner data and Internet data. We find that “9” is the most frequent ending for the penny, dime, dollar, and ten-dollar digits; the most common price changes are those that keep the price endings at “9”; 9-ending prices are less likely to change than non-9-ending prices; and the average size of price change is larger for 9-ending than non-9-ending prices. We conclude that 9-ending contributes to price rigidity from penny to dollar digits and across a wide range of product categories, retail formats, and retailers.