Is There Any Regional Price Disparity in Peninsular Malaysia?

Chin Lee ()

MPRA Paper from University Library of Munich, Germany

Abstract: This study examines whether there are significant differences in prices across four regions in Peninsular Malaysia, namely Northern, Central, Southern, and Eastern Peninsular Malaysia. Disaggregate monthly consumer price indices for twelve types of goods and services from July 2010 to February 2013 were analyzed. Based on the Levin and Lin (1993) panel unit root test, this study found statistical evidence of price convergence among the four zones for two-thirds of the price groups. Most importantly, price convergence exists for three major consumers’ expenditures items: Food and Non-Alcoholic Beverages; Housing, Water, Electricity, Gas and Other Fuels; and Transport. Indeed, these eight price groups that converged comprised 83.6% of total consumer expenditures. Evidence of price convergence among these price groups suggests that Peninsular Malaysia markets are highly integrated. In addition, this study found that the half-life for the tradable goods is roughly 2-3 months and for nontradable goods about 5-10 months. These findings indicate that tradable goods prices adjust more rapidly than nontradable goods do.

Keywords: regional price disparity; price convergence; half-life; speed of adjustment; panel unit root test (search for similar items in EconPapers)
JEL-codes: D12 E31 E64 R11 R12 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-mac, nep-sea and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in Romanian Review of Regional Studies 1.11(2015): pp. 49-58

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/70592/1/MPRA_paper_70592.pdf original version (application/pdf)

Related works:
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:pra:mprapa:70592

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().