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What is the Price of Tea in China? Goods Prices and Availability in Chinese Cities

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  • Robert C Feenstra
  • Mingzhi Xu
  • Alexis Antoniades

Abstract

We examine the price and variety of a sample of consumer goods at the barcode level in cities within China. Unlike the position in the United States, in China the prices of goods tend to be lower in larger cities. We explain that difference between the countries by the more uneven spatial distribution of manufacturers’ sales and retailers in China, and we confirm the pro-competitive effect of city size on reducing markups there. In both countries, there is a greater variety of goods in larger cities, but that effect is more pronounced in China. Combining the lower prices and greater variety, the price indexes in China for the goods we study fall with city size by around seven times more than in the United States.

Suggested Citation

  • Robert C Feenstra & Mingzhi Xu & Alexis Antoniades, 2020. "What is the Price of Tea in China? Goods Prices and Availability in Chinese Cities," The Economic Journal, Royal Economic Society, vol. 130(632), pages 2438-2467.
    • Handle: RePEc:oup:econjl:v:130:y:2020:i:632:p:2438-2467.
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    File URL: http://hdl.handle.net/10.1093/ej/ueaa066
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    Cited by:

    1. Antoniades, Alexis & Clerides, Sofronis & Xu, Mingzhi, 2023. "Multi-product firm price and variety response to firm-specific cost shocks," International Journal of Industrial Organization, Elsevier, vol. 90(C).
    2. Hoste, J. & Verboven, F., 2024. "Uncovering the Sources of Cross-border Market Segmentation: Evidence from the EU and the US," Janeway Institute Working Papers 2408, Faculty of Economics, University of Cambridge.
    3. Hoste, J. & Verboven, F., 2024. "Uncovering the Sources of Cross-border Market Segmentation: Evidence from the EU and the US," Cambridge Working Papers in Economics 2402, Faculty of Economics, University of Cambridge.

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