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Stickier than Sticker Prices?

5/16/2011

3 Comments

 
I have no quantitative evidence to support this, but I get the impression that prices are stickier in Ghana than in the United States.  My theory is that this is, ironically, because Ghana lacks sticker prices. 

Most people buy things in the market, and they just "know" the price.  If someone tries to charge them higher, they won't buy. My guess is that changing common knowledge of a price is actually a lot harder than just changing a sticker price. 

Could somebody do a study on this please? I recommend an RCT in isolated markets where you select half of the markets to go to sticker prices, where you provide the stickers.  Those markets operate with the stickers for a few months, where the control markets continue to operate without marked prices.  Then you introduce a price shock for, say, tomatoes, send out mystery shoppers, and see where prices change more quickly.  I would do it myself but I am busy. 
3 Comments
Linda Pappagallo
5/16/2011 02:03:57 am

Really interesting. I have been pondering on the same thing for long now. But the thing I realized is that prices definately vary hugely for tomatoes, bananas,peppers,carrots (sometimes it doubles in one week and then goes back to "normal"). Garlic,and the leafy stuff, onions,beans, plantain,yam, spices, other non vegetables are pretty much fixed. Are prices less stickier for Salimingas though?
Linda

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Liz link
5/16/2011 02:22:16 am

Everything you cite as having fixed prices, I agree with. I also find I get consistent prices for bananas, and normally for tomatoes, peppers and carrots as long as I don't ask the price. (Blattman has a blog post about this regarding taxis.) The exceptions I see occur when the quality varies (you pay extra if the carrots are really beautiful...) and during the lean season, when tomato prices explode and sometimes tomatoes even disappear from the market. Watch out when eating Ghanaian dishes during this period, as the tomato to peppe ratio falls!!

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Liz link
5/16/2011 02:24:20 am

BTW, I can feel a post on Saliminga prices coming on...

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    About Liz

    I have worked in economic policy and research in Washington, D.C. and Ghana. My husband and I recently moved to Guyana, where I am working for the Ministry of Finance. I like riding motorcycle, outdoor sports, foreign currencies, capybaras, and having opinions. 

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