Assessing a feasible degree of product market integration. (A pilot analysis)
AbstractPerfect integration eludes the real world, so we suggest a realistic benchmark standard for judging the extent of market integration in various economies. We estimate the degree of integration in the US product market, widely acknowledged to be the most integrated among geographically large economies, so as to provide a reference for measuring Russian market integration. Prices for 27 grocery items across 29 cities of the United States in the first quarter of 2000 are used as empirical data. The estimated degree of integration turns out to be very close to values obtained for Russia for 2000. Apparently, market integration in Russia has in recent years moved toward conditions found in advanced market economies. The roles of other factors that could potentially cause segmentation of the US market are also analyzed.
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Bibliographic InfoPaper provided by Bank of Finland, Institute for Economies in Transition in its series BOFIT Discussion Papers with number 3/2006.
Length: 29 pages
Date of creation: 19 Apr 2006
Date of revision:
Publication status: Published in Journal of Economic Studies, 2010, pages 419-437.
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Postal: Bank of Finland, BOFIT, P.O. Box 160, FI-00101 Helsinki, Finland
Phone: + 358 10 831 2268
Fax: + 358 10 831 2294
Web page: http://www.suomenpankki.fi/bofit_en/
More information through EDIRC
market integration; price dispersion; law of one price; United States; Russia;
Other versions of this item:
- Konstantin Gluschenko & Darya Karchevskaya (Kulighina), 2010. "Assessing a feasible degree of product market integration: a pilot analysis," Journal of Economic Studies, Emerald Group Publishing, vol. 37(4), pages 419-437, September.
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F15 - International Economics - - Trade - - - Economic Integration
- L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-10-07 (All new papers)
- NEP-CIS-2006-10-07 (Confederation of Independent States)
- NEP-TRA-2006-10-07 (Transition Economics)
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