micro data in macroeconomics - examples · selectedongoingandplannedprojects...

Micro data in macroeconomicsExamples

Guenter W. Beck

Micro data in macroeconomicss 1 / 28

Overview

1 Background: MIGGROPRICES initiativeObjectives

2 Selected ongoing and planned projectsPrice dispersion and international goods-market integrationWorld Price Monitor (WPM)Who bears the burden of tax change? How effective are “sin taxes”?Pass-through of large exchange rate shocks to consumer pricesOther projects


Background: MIGGROPRICES initiative

Table of contents




Background: MIGGROPRICES initiative Objectives

Table of contents





Our objectives

• Foster research efforts analyzing (large volumes of) granular price datato obtain macroeconomic-oriented insights.

miggroprices

Research areas

I.A Internationalprice

determination

I.B Micro pricingand macrodynamics

I.C Costpass-through

I.D Price indexconstruction/House-

hold-levelinflation rates



Data partners and supporters

Gesellschaft für Konsumforschung (GfK)

Kantar Worldpanel

Europanel

Center for Financial Studies, CFS


Selected ongoing and planned projects

Table of contents




Selected ongoing and planned projects Price dispersion and international goods-market integration

Table of contents





Price dispersion and international goods-market integration

• Objective: determine the degree of international goods-marketsegementation by analyzing prices of the same good paid on differentsides of a given border.

• Intuition:Discontinuity plots for the price of a selected good

(a) BE-NL (b) GE-NL (c) BE-GE

• To make inference on the price gap we follow gopietal2011 andemploy a regression-discontinuity analysis.




Locations of households at the borders

(a) BE-NL




Border effects: national brands vs. private label

(a) National brands

(b) Private labelMicro data in macroeconomicss 11 / 28

Selected ongoing and planned projects World Price Monitor (WPM)

Table of contents





WPM: Objectives

• The WPM research initiative aims at improving price measures and ourunderstanding of price dynamics along several dimensions:

=⇒ Compute household-specific or region-specific prices indices,



WPM: preliminary results

Inflation by income groups: US

.75

.8

.85

.9

.95

1Av

g. A

nnua

l Inf

latio

n, 2

009

- 201

7 (%

)

1 2 3 4 5Income Quintile



WPM: preliminary results

(a) Germany

.55

.6

.65

.7

Avg

. Ann

ual I

nfla

tion,

200

9 -

2017

(%

)

1 2 3 4 5Income Quintile

(b) France

-.5

-.4

-.3

-.2

Avg

. Ann

ual I

nfla

tion,

200

8 -

2016

(%

)

1 2 3 4 5Social Class Ranking


Selected ongoing and planned projects Effects on goods’ taxes

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Pass-through of tax changes

• Basic underlying questions:• Who bears the burden of an increase in the taxes on alcoholic beverages?• Are taxes on sugary drinks effective?• Who bears the burden of changes in corporate business taxes?

=⇒ Important questions both from an academic and policy point ofview.




• In the Netherlands, excise taxes on many alcoholic beverages(fermented beverages) were raised in 2008.

• To examine the “pass-through” of the tax increases on consumerprices:=⇒ Examine how prices on affected alcoholic goods change in theNetherlands in 2008.

• Problem: Prices might change for reasons not related to the increasein the excise taxes!

• To overcome this problem: Form a “control group” of identical goodsunderlying the same external influences apart from the tax change.

• To form the control group: Use Belgian (and German) data.=⇒ How well do Belgian goods work as control group?




• Comparison of Dutch and Belgian/German prices on wine:

(a) BE-NL (b) DE-NL



Pass-through of local corporate business taxes

• Local business taxes are set annually by local (country level)governments.

• Accounts for 49% of local tax revenue.• Tax rate 17.6% (on average 2005-2008).• Local tax rate determined by uniform, federally determined base factor

and the locally determined multiplier.



Pass-through of local corporate business taxes

Local business taxes in Germany


Selected ongoing and planned projects Pass-through of large exchange rate shocks to consumer prices

Table of contents





Pass-through of large exchange rate shocks to consumerprices

• One of the key questions in international macroeconomics: how fastand to what extent do relative prices and quantities in small openeconomies respond to an exchange rate shock?

• Standard problem is identification what is a pure (exchange-rate)shock?

• Large appreciation of the Swiss Frank in 2005 provides an excellent“natural experiment”:

• Shock was large relative to typical exchange rate fluctuation in advancedeconomies

• It was unexpected• It was not caused or correlated in any obvious way with other aggregate

shocks shaping relative prices and quantities.Micro data in macroeconomicss 23 / 28



• Pass-through: official CPI




• Pass-through: scanner data




• Cross-border shopping


Selected ongoing and planned projects Other projects

Table of contents




Selected ongoing and planned projects Other projects

Other projects

• The global component of inflation: evidence from micro consumer data• Impact of income and wealth shocks on consumption of households• Impact of income and wealth shocks on consumption of households• Regional inflation rates and Phillips curves: evidence from European

micro price data• The morphology of price dispersion in the euro area• Price elasticities and demand-side real rigidities in micro data and in

macro models


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