Price Creep

The gradual and steady increase in the valuation or market price of an asset. Price creep refers to a situation in which either an individual or a group of individuals gradually lessen its reservations about paying higher prices for a given asset.

Everyday life provides commonplace examples of price creep in action. Rates charged at movie theaters or for a casual dinner out at a restaurant can be subject to price creep, especially in high-profile urban areas. Over time, customers become accustomed to paying higher prices for the good or service in question; as a result, prices at most business tend to keep rising year after year, in excess of the rate of inflation.

In the financial markets, price creep can be seen where investors gradually give greater valuation to a financial security. For example, at first, an investor may deem a given stock to be worth $10 per share. But after following the company for a while and watching the stock's price trend upward, the investor may eventually relent and decide that $15 per share is a fair price for the stock, even though that person initially deemed $10 to be a fair market value.


Investment dictionary. . 2012.

Look at other dictionaries:

  • creep — Ⅰ. creep UK US /kriːp/ verb [I] ► to change very slowly, especially to increase: »Fuel prices dropped in April, but they are starting to creep higher now. Ⅱ. creep UK US /kriːp/ noun [U] ► slow and gradual change, especially when something… …   Financial and business terms

  • creep up — verb advance stealthily or unnoticed (Freq. 1) Age creeps up on you • Syn: ↑sneak up • Hypernyms: ↑advance, ↑progress, ↑pass on, ↑move on, ↑march o …   Useful english dictionary

  • Margin Creep — refers to the behavior of a company that chooses to focus only on the high end, high margin products, even if customers show an inclination towards more value oriented products and/or services. A product s margin is the difference between the… …   Investment dictionary

  • Consumer Price Index (United Kingdom) — For other uses, see Consumer price index. CPI, 1988 to present, 2005=100 …   Wikipedia

  • Pollyanna Creep — is a phrase that originated with John Williams, a California based economic analyst and statistician. [ [http://www.shadowstats.com/article/57] GOVERNMENT ECONOMIC REPORTS: THINGS YOU VESUSPECTED BUT WERE AFRAID TO ASK! A Series Authored by… …   Wikipedia

  • Economy of the United States — Economy of United States Rank 1st (nominal) / 1st (PPP) Currency US$ (USD) …   Wikipedia

  • Criticism of advertising — Advertising is a form of communication intended to persuade an audience to purchase or take some action upon products, ideals, or services. While advertising can be seen as necessary for economic growth, it is not without social costs.… …   Wikipedia

  • Electricity meter — Typical North American domestic analog electricity meter …   Wikipedia

  • Sailcloth — Sails have been made from cloth for all of recorded history. Typically sails were made from flax (linen), hemp or cotton in various forms including canvas. However, modern sails are rarely made from natural fibers. Most sails are made from… …   Wikipedia

  • Stirling engine — Alpha type Stirling engine. There are two cylinders. The expansion cylinder (red) is maintained at a high temperature while the compression cylinder (blue) is cooled. The passage between the two cylinders contains the regenerator …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.