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dc.contributor.authorHendel, Igalen_US
dc.contributor.authorNevo, Aviven_US
dc.description.abstractTemporary 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 dynamic consumer behavior: at low prices consumers stockpile for future consumption. This effect, if present, has broad economic implications. We construct a dynamic model of consumer choice, use it to derive testable predictions and test these predictions using two years of scanner data on the purchasing behavior of a panel of households. The results support the existence of household stockpiling behavior and suggest that static demand estimates may overestimate price sensitivity.en_US
dc.publisher|aCenter for the Study of Industrial Organization at Northwestern Univ. |cEvanston, Ill.en_US
dc.relation.ispartofseries|aCSIO working paper |x0061en_US
dc.titleSales and consumer inventoryen_US
dc.type|aWorking Paperen_US

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