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Value Deflation

What is 'Value Deflation'

When companies cut their costs without increasing prices for consumers. Value deflation occurs when retailers and service providers give out smaller portions, fewer services and generally provide less for the same price.

This is also referred to as "shadow inflation."

Explaining 'Value Deflation'

Examples of value deflation include reductions in the amount of food in a typical package such as a juice box or bag of potato chips, reduced portion sizes at restaurants, and curtailed cleaning and concierge services at hotels. Of course, all of these businesses continue to charge the same price despite the reduction in products or services. This method is an alternative to raising prices that the consumer is less likely to notice.


Further Reading


Deflating profitability
www.sciencedirect.com [PDF]
… We deflate the two profit measures consistently in these comparisons, by the book value of total … Microcaps are stocks with market values of equity below the 20th percentile of the NYSE market … value of total assets, the book value of equity (BE), and the market value of equity (ME …

Price deflation and consumption: central bank policy and Japan's economic and financial stagnationPrice deflation and consumption: central bank policy and Japan's economic and financial stagnation
www.sciencedirect.com [PDF]
… We deflate the two profit measures consistently in these comparisons, by the book value of total … Microcaps are stocks with market values of equity below the 20th percentile of the NYSE market … value of total assets, the book value of equity (BE), and the market value of equity (ME …

The value relevance of environmental performanceThe value relevance of environmental performance
www.tandfonline.com [PDF]
… We deflate the two profit measures consistently in these comparisons, by the book value of total … Microcaps are stocks with market values of equity below the 20th percentile of the NYSE market … value of total assets, the book value of equity (BE), and the market value of equity (ME …

Measuring value relevance in a (possibly) inefficient marketMeasuring value relevance in a (possibly) inefficient market
onlinelibrary.wiley.com [PDF]
… We deflate the two profit measures consistently in these comparisons, by the book value of total … Microcaps are stocks with market values of equity below the 20th percentile of the NYSE market … value of total assets, the book value of equity (BE), and the market value of equity (ME …

Financial structure and economic developmentFinancial structure and economic development
www.journals.uchicago.edu [PDF]
… We deflate the two profit measures consistently in these comparisons, by the book value of total … Microcaps are stocks with market values of equity below the 20th percentile of the NYSE market … value of total assets, the book value of equity (BE), and the market value of equity (ME …

The nonlinear economics of debt deflationThe nonlinear economics of debt deflation
books.google.com [PDF]
… We deflate the two profit measures consistently in these comparisons, by the book value of total … Microcaps are stocks with market values of equity below the 20th percentile of the NYSE market … value of total assets, the book value of equity (BE), and the market value of equity (ME …

Economic crises and the debt-deflation episode in ThailandEconomic crises and the debt-deflation episode in Thailand
www.jstor.org [PDF]
… We deflate the two profit measures consistently in these comparisons, by the book value of total … Microcaps are stocks with market values of equity below the 20th percentile of the NYSE market … value of total assets, the book value of equity (BE), and the market value of equity (ME …

Pricing deflation risk with US Treasury yieldsPricing deflation risk with US Treasury yields
academic.oup.com [PDF]
… We deflate the two profit measures consistently in these comparisons, by the book value of total … Microcaps are stocks with market values of equity below the 20th percentile of the NYSE market … value of total assets, the book value of equity (BE), and the market value of equity (ME …

Lessons from the debt-deflation theory of sudden stopsLessons from the debt-deflation theory of sudden stops
pubs.aeaweb.org [PDF]
… We deflate the two profit measures consistently in these comparisons, by the book value of total … Microcaps are stocks with market values of equity below the 20th percentile of the NYSE market … value of total assets, the book value of equity (BE), and the market value of equity (ME …

Time-series coefficient variation in value-relevance regressions: A discussion of Core, Guay, and Van Buskirk and new evidenceTime-series coefficient variation in value-relevance regressions: A discussion of Core, Guay, and Van Buskirk and new evidence
www.sciencedirect.com [PDF]
… We deflate the two profit measures consistently in these comparisons, by the book value of total … Microcaps are stocks with market values of equity below the 20th percentile of the NYSE market … value of total assets, the book value of equity (BE), and the market value of equity (ME …


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