Économie et Statistique n° 386 How residents see their neighbourhoods: between well off and cut off - Price rigidity in France: information from consumer price collections - Are wages rigid? The case of France in the late 1990s

Economie et Statistique
Paru le : 01/03/2006
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Price rigidity in France: information from consumer price collections

Laurent Baudry, Hervé Le Bihan, Patrick Sevestre et Sylvie Tarrieu

Different indicators (price lifetimes, frequency and extent of price changes) are calculated based on consumer price index (CPI) price collections for the 1994-2003 period in an endeavour to describe consumer price changes in France. The average «weighted» period of time between two price changes is approximately three quarters in the sectors covered by the database (65% of the CPI). Huge differences are found between outlet types and sectors: prices in the service sector change more rarely (generally once a year) than manufactured product prices (generally twice a year). Food prices (excluding fresh produce prices, which were not available) and energy prices (excluding town gas and electricity) are more flexible. With the exception of the service sector, price decreases are virtually as frequent as price increases since an average of four in ten price variations are price decreases. Lastly, the average size of a price variation is large (at around 10%), but a not-inconsiderable proportion of small price variations is found (the median level of both price increases and decreases being approximately 5%). The moderate inflation observed in France over the last decade can be broken down in terms of individual price changes as follows: relatively rare, but significant, increases and decreases, with increases being slightly more frequent.

Economie et Statistique
No 386
Paru le : 01/03/2006