NSF Award Abstract - #0241623| NSF Award Abstract - #0241623 |
AWSFL008-DS3 |
| NSF Org | SES |
| Latest Amendment Date | September 13, 2004 |
| Award Number | 0241623 |
| Award Instrument | Continuing grant |
| Program Manager |
Daniel H. Newlon SES DIVN OF SOCIAL AND ECONOMIC SCIENCES SBE DIRECT FOR SOCIAL, BEHAV & ECONOMIC SCIE |
| Start Date | March 1, 2003 |
| Expires | February 28, 2005 (Estimated) |
| Expected Total Amount | $128152 (Estimated) |
| Investigator | Mark Bils bils@troi.cc.rochester.edu (Principal Investigator current) |
| Sponsor |
University of Rochester 517 Hylan Bldg. Rochester, NY 14627 585/275-4031 |
| NSF Program | 1320 ECONOMICS |
| Field Application | |
| Program Reference Code | ,0000,OTHR, |
This research exploits confidential Consumer Price Index (CPI) micro data, to study two issues---quality improvements for consumer goods and movements in firms' marginal costs and price markups due to temporary product stockouts over market fluctuations.The first part of the research studies the sensitivity of consumer price inflation and, quality growth, to treatment of the price increases associated with the introduction of new models of consumer durables. The BLS' resampling method can be exploited to gain information on how quantities sold change with model turnovers. This information is then used to gauge how much of price increases for new goods should be attributed to quality improvements.
The second part of the research shows how information on temporary product stockouts, provide more direct information on how firms' cost and prices behave over the market cycle than existing methods. The stockout data are available for a much wider and more disaggregate set of goods than data on finished inventories. The research shows how price markups can either be attributed to price stickiness or active price adjustments by sellers.
Results of this research have important policy implications. The ability to break price increases between quality improvements and consumer price inflation is central to the goals of collecting information on prices. The results can directly inform measurement of price increases used to judge changes in standards of living. The results can yield suggestions for revisions of BLS methods or suggestions for additional statistics the BLS could make available. The results of the research could also have an effect on how inflation should be measured. This could affect the determination of cost living adjustments in wage contracts, social security payments, insurance, and ultimately the rate of inflation itself.
