Convergence of Regional Food Inflation in Russia

This paper studies the convergence of the growth rates of food prices in the regions of Russia. The analysis confirms the hypothesis of the convergence of regional food inflation in 2013-2022. A panel unit root test on the rolling window method is used to identify the possible changes in dynamics. The results of the test show that the convergence of regional food price indices to the all-Russian index accelerated during 2013-2022. A matrix of mutual convergence coefficients is also calculated. Visualisation of it using multidimensional scaling allows the identification of groups of regions with high levels of convergence toward one another. The results of the analysis show that the factors constraining convergence include differences in the structure of goods weights for calculating consumer price indices, in the level of transport and logistics connectivity, and in the degree of retail chain penetration. The study complements the literature on the convergence of inflation by not only testing the convergence hypothesis, but also by assessing changes in the dynamics of convergence and by reviewing the mutual convergence of price growth rates in the regions.