Markups for Consumers

M, 2021

22apr12:00 pm1:00 pmMarkups for ConsumersEvent Type :Seminar Speaker: Prof. Dr. Bernhard Ganglmair

Event Details

Abstract
A central motivating factor for studying price markups is their effect on consumer welfare. Reported estimates of (firm-level) price markups in the literature, however, are often focused on industry or cross-country comparisons. These treat different industries equally rather than based on how relevant they are for consumers. We propose markup measures in which firm-level price markups are weighted according to consumption expenditures in the respective industries. Using a concordance table between consumption categories (otherwise used for the calculation of consumer price indices) and a firm’s industry classification, we report results for Germany for the years 2002 through 2016. We find that consumption-weighted price markups are higher than the conventionally reported revenue-weighted markups. We further show that consumption-weighted markups have increased faster for low-income and medium-income households, which highlights a potential role of price markup as a contributing factor to changes of inequality in society.

Speaker

Prof. Dr. Bernhard Ganglmair

Time

(Thursday) 12:00 pm - 1:00 pm

Location

Microsoft Teams

Organizer

Wihan Marais19850409@sun.ac.za