Price-Setting Behavior in Brazil: Survey Evidence

Price surveys became popular after the seminal work of Blinder (Am Econ Rev 81(2):89–100, 1991) exploring US firms’ price-setting practices, which filled some blanks left by the simple observation of prices charged by firms. The present paper reports the findings from a survey conducted by the Central Bank of Brazil with local firms and discusses some policy implications. The sample consisted of 7002 firms and three economic sectors: manufacturing, services and commerce. Data suggest important features about price-setting behavior in Brazil: the cost of reviewing prices is low, but there is significant nominal rigidity—firms report to change prices approximately 3.6 times per year; state-dependent rules seem to be more frequent than time-dependent behavior; markup pricing appears to be the dominant strategy; and the two most important factors driving price changes in Brazil are the cost of intermediate goods and the inflation rate. © 2018, Springer International Publishing AG, part of Springer Nature.