Price-Setting in Ukraine: Evidence from Online Prices

Abstract

This study examines price duration and price-setting mechanisms in Ukraine using web-scraped prices. I found that the mean average duration of prices is about 2 months. Average price duration is lower for those products that are more exposed to temporary price changes (sales). Moreover, imported goods have a higher average price duration compared to domestic goods. In terms of the price-setting mechanism, the data supports timedependent price setting behavior over state-dependent. The evidence of time-dependent price setting is 1) the size of price change being positively related to the age of price; 2) many price changes of a size close to zero; and 3) the hazard function being non-increasing for the whole sample and tends to be flatter within relatively homogeneous groups of products.

Keywords

• online prices
• sticky prices
• price duration
• price-setting scheme