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Federal Reserve Bank of San Francisco
Working Paper Series
Shopping Time
Nicolas Petrosky-Nadeau
Etienne Wasmer
Shutian Zeng
Abstract

The renewal of interest in macroeconomic theories of search frictions in the goods market requires a deeper understanding of the cyclical properties of the intensive margins in this market. We review the theoretical mechanisms that promote either procyclical or countercyclical movements in time spent searching for consumer goods and services, and then use the American Time Use Survey to measure shopping time through the Great Recession. Average time spent searching declined in the aggregate over the period 2008-2010 compared to 2005-2007, and the decline was largest for the unemployed who went from spending more to less time searching for goods than the employed. Cross-state regressions point towards a procyclicality of consumer search in the goods market. At the individual level, time allocated to different shopping activities is increasing in individual and household income. Overall, this body of evidence supports procyclical consumer search effort in the goods market and a conclusion that price comparisons cannot be a driver of business cycles.


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Nicolas Petrosky-Nadeau & Etienne Wasmer & Shutian Zeng, Shopping Time, Federal Reserve Bank of San Francisco, Working Paper Series 2014-24, Sep 2014.
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Keywords: Goods market search; time allocation; American Time Use Survey; business cycles.
DOI: 10.24148/wp2014-24
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