The price of distance: pricing-to-market and geographic barriers
The price of distance: pricing-to-market and geographic barriers
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距离的代价:市场定价和地理障碍
DOI:
10.1093/jeg/lbab013
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发表时间:
2021
影响因子:
2.9
通讯作者:
Takechi Kazutaka
中科院分区:
文献类型:
--
作者:
Kano Kazuko;Kano Takashi;Takechi Kazutaka
Trade costs contribute to price differentials across geographically separated regions. However, when using price differential data, the identification of distance-elastic trade costs depends on how producers set prices in remote markets. To address this problem, we first empirically demonstrate that a variable markup model is more relevant than a constant markup model to describe the data variation. We then adopt a nonhomothetic preference framework to consider pricing-to-market and self-selection bias to pin down the distance effect. If these factors are not accounted for, the distance elasticity of trade costs is small. However, by incorporating these mechanisms, our empirical analysis using micro-level data reveals that the distance effect is significantly large, suggesting that the price of geographic barriers to regional trade is high.
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