You are not currently logged in.
Access JSTOR through your library or other institution:
If You Use a Screen ReaderThis content is available through Read Online (Free) program, which relies on page scans. Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Price Dispersion and Inflation: Evidence from Israel
Theresa Van Hoomissen
Journal of Political Economy
Vol. 96, No. 6 (Dec., 1988), pp. 1303-1314
Published by: The University of Chicago Press
Stable URL: http://www.jstor.org/stable/1831953
Page Count: 12
You can always find the topics here!Topics: Prices, Economic inflation, Consumer prices, Market prices, Relative prices, Consumer information, Liver, Empirical evidence, Consumer behavior, Stock prices
Were these topics helpful?See something inaccurate? Let us know!
Select the topics that are inaccurate.
Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Preview not available
The paper considers the question whether observed price differentials reflect perceived differences in quality, service agreements, or location or whether information imperfections can explain this phenomenon. It sets out theoretical arguments linking inflation to reductions in the information stock held by agents and thus to greater price dispersion. The hypothesis is tested using monthly price data for 13 uniquely defined goods sold in Israel between 1971 and 1984. Price dispersion is shown to be positively related to the rate of market price inflation. Since inflation is an unlikely proxy for changes in perceived characteristics, the findings support price dispersion theories based on "optimally imperfect" decision making
Journal of Political Economy © 1988 The University of Chicago Press