Journal article

Publication year: 2006

Pages: 51-67

Journal: Agribusiness

Volume number: 22

Issue number: 1

ISSN: 0742-4477

eISSN: 1520-6297

DOI Link: https://doi.org/10.1002/agr.20075

Publisher: Wiley

Abstract: 
A substantial degree of price rigidity has been reported for branded
foods in various studies with scanner data. One possible explanation for
price rigidity is the existence of psychological pricing points. The
authors analyze to what extent psychological pricing plays a role in
grocery retailing and whether it contributes to the price rigidity of
branded foods in Germany. Psychological pricing—defined here as
just-below-the-round-figure-pricing—is empirically analyzed with scanner
data of weekly prices for 20 food brands in 38 retail outlets from
September 1996 to June 1999. Psychological pricing turned out to be
extremely important in German food retailing. Branded food prices are
remarkably sticky and psychological pricing points contribute strongly
to price rigidity. Other factors like the sales phenomenon and
firm-specific effects are additionally important.

Harvard Citation style: Herrmann, R. and Moeser, A. (2006) Do psychological prices contribute to price rigidity? Evidence from German scanner data on food brands, Agribusiness, 22(1), pp. 51-67. https://doi.org/10.1002/agr.20075

APA Citation style: Herrmann, R., & Moeser, A. (2006). Do psychological prices contribute to price rigidity? Evidence from German scanner data on food brands. Agribusiness. 22(1), 51-67. https://doi.org/10.1002/agr.20075