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Price convergence and market integration in Russia

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  • Gluschenko, Konstantin

Abstract

Following the price-liberalization reforms implemented by Russia in 1992, an initial period of disconnect between regional markets began to transform around 1994. This paper analyzes the spatial pattern of goods market integration that evolved within Russia in 1994-2000, classifying country's regions into three categories: integrated with a benchmark region, not integrated but tending towards integration, and not integrated and not tending towards integration. To quantify tendencies towards integration, an AR(1) model of regional price differentials is augmented with a trend term that is capable of displaying asymptotic decay (indicating price convergence). The results obtained suggest that only about one-fifth of Russia's regions appear as not integrated and showing no tendency towards integration over the sample period.

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Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 41 (2011)
Issue (Month): 2 (March)
Pages: 160-172

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Handle: RePEc:eee:regeco:v:41:y:2011:i:2:p:160-172
Contact details of provider: Web page: http://www.elsevier.com/locate/regec

Keywords: Law of one price Price dispersion Nonlinear trend Russian regions;

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Find related papers by JEL classification:
  • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
  • P22 - Economic Systems - - Socialist Systems and Transition Economies - - - Prices
  • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
  • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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Cited by:

  1. Konstantin Gluschenko, 2010. "Impact of The Global Crisis on Spatial Relationships in Russia," LICOS Discussion Papers 26910, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  2. Gluschenko, Konstantin, 2011. "Price convergence and market integration in Russia," Regional Science and Urban Economics, Elsevier, vol. 41(2), pages 160-172, March.

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