Cross-Border Shopping: Evidence and Welfare Implications for Switzerland

Ariel Burstein, Sarah Lein and Jonathan Vogel

No 19516, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Consumers access foreign goods by purchasing them domestically or shopping abroad. We present new facts on cross-border shopping by Swiss households showing, for example, that prices of identical products are lower in neighboring countries, cross-border shopping shares fall with distance to the border, and price gaps and cross-border shopping shares rose following the 2015 Swiss Franc appreciation. We use a simple model of cross-border shopping to quantify how variation across space in cross-border shopping results in heterogeneous changes in cost-of-living in response to changes in international prices such as the 2015 Swiss Franc Appreciation and the 2020 Covid-19-related closing of the border.

Keywords: Cross-border shopping; Cost of living; Household heterogeneity (search for similar items in EconPapers)
JEL-codes: E31 F10 F41 F60 (search for similar items in EconPapers)
Date: 2024-09
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