Heterogeneity in price setting behavior, spatial disparities and sectoral diversity: Evidence from a panel of Italian firms

► Using a panel fixed effect model, we analyze price-setting behavior in Italy. ► The results confirm that geographical heterogeneity and sectoral differences matter. ► Firms located in the South present stronger price rigidity than the rest of Italy. ► Industries with a high labor share change prices less frequently than others. ► Price changes decrease with firms' size, large firms are the stickiest price setters.