2020/10/30 by Tobias Renkin, Claire Montialoux, Michael Siegenthaler · 3 citations
Economics, Econometrics and Finance · Business, Management and Accounting · #Economics of Agriculture and Food Markets #Consumer Market Behavior and Pricing #Monetary Policy and Economic Impact
paper · doi:10.1162/rest_a_00981
openalex publication_date 2020/10/30 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/04
Abstract This paper estimates the pass-through of minimum wage increases into the prices of U.S. grocery and drug stores. We use high-frequency scanner data and leverage a large number of state-level increases in minimum wages between 2001 and 2012. We find that a 10% minimum wage hike translates into a 0.36% increase in the prices of grocery products. This magnitude is consistent with a full pass-through of cost increases into consumer prices. We show that price adjustments occur mostly in the three months following the passage of minimum wage legislation rather than after implementation, suggesting that pricing of groceries is forward-looking.