Can Price Dispersion Reveal Distance-Related Trade Costs? Evidence from the United States

Anderson Michael A. (), Kurt Schaefer () and Stephen Smith ()
Additional contact information
Anderson Michael A.: Washington and Lee University, Lexington, VA 24450, USA

Global Economy Journal, 2013, vol. 13, issue 2, 151-173

Abstract: We offer insights on how distance-related trade costs may best be inferred from price-dispersion measures. Using a simple spatial model of price dispersion, we argue that measures of price dispersion that are not spatially informed can mislead researchers into concluding that distance-related costs are small even when such costs are the major determinant of price dispersion. With intra-United States data on eleven goods, we find that distance-related costs are large and are indeed underestimated when inferred from standard, non-spatial, price dispersion measures. Our empirical findings have implications for studies of market integration policies (such as trade liberalization and currency unions) and the significance of economic geography.

Keywords: spatial models; price dispersion; economic integration; trade costs (search for similar items in EconPapers)
JEL-codes: E31 F36 F41 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://doi.org/10.1515/gej-2012-0026 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
Journal Article: Can Price Dispersion Reveal Distance-Related Trade Costs? Evidence from the United States (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:glecon:v:13:y:2013:i:2:p:151-173:n:2

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/gej/html

DOI: 10.1515/gej-2012-0026

Access Statistics for this article

Global Economy Journal is currently edited by Jannett Highfill

More articles in Global Economy Journal from De Gruyter
Bibliographic data for series maintained by Peter Golla ().