Exaggerated Death of Distance: Revisiting Distance Effects on Regional Price Dispersions

Kazuko Kano, Takashi Kano and Kazutaka Takechi
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Kazutaka Takechi: Faculty of Economics, Hosei University

No CIRJE-F-760, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: This paper empirically establishes the significant roles of transport costs in price dispersions across regions. We identify and estimate the iceberg-type distance-elastic transport costs as a parameter of a structural model of cross-regional price differentials featuring product delivery decisions. Utilizing a data set of wholesale prices and product delivery patterns of agricultural products in Japan, our structural estimation approach finds large distance elasticities of the transport costs. The result confirms that geographical barriers are an economically significant contributor to the failures of the law of one price.

Pages: 30pages
Date: 2010-09
New Economics Papers: this item is included in nep-agr, nep-geo, nep-int and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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http://www.cirje.e.u-tokyo.ac.jp/research/dp/2010/2010cf760.pdf (application/pdf)

Related works:
Journal Article: Exaggerated death of distance: Revisiting distance effects on regional price dispersions (2013)
Working Paper: Exaggerated Death of Distance: Revisiting Distance Effects on Regional Price Dispersions (2012)
Working Paper: Exaggerated Death of Distance: Revisiting Distance Effects on Regional Price Dispersions (2012)
Working Paper: Exaggerated Death of Distance: Revisiting Distance Effects on Regional Price Dispersions (2012)
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