Price movement during the holidays

Faculty's CornerComments Off on Price movement during the holidays

by: Prof. Kresna Navarro-Mansueto


Aside from the abrupt weight gain during the Christmas season, one noticeable effect is the soaring prices of consumer goods, especially food. One culprit is our spending behavior. During this season, we have a relatively high willingness to pay (WTP) for goods – we think of buying those that we cannot buy in the previous months.

Our willingness to pay comes from the unusual high money we receive from months starting October until December, while others are still receiving unusual take-home pay until February (e.g., Chinese New Year). With the extra money, we tend to buy more goods. Sellers are happy to serve at our whim, noticing our spending behavior. With their stocks running low, they tend to bid out their goods to whoever is willing to pay at high prices. The bidding-like activity causes the prices to spiral; thus, the current situation in our market; of course, other factors are constant (i.e., ceteris paribus).


Comments are closed.

  • Telefax:

     (+63-32) 232-8185 local 304

    E-mail Address:

     [email protected]

     [email protected]

    Office Hours:

     Mondays to Fridays
    8:00AM – 5:00PM


    School of Management Office,

    University of the Philippines Cebu Gorordo Avenue, Lahug, Cebu City,

    Cebu 6000 Philippines


© 2017 UP Cebu School of Management. All rights reserved. Configured by UP Cebu Information Technology Center.