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Prices and Immigration: A Firm Level Analysis

Author

Listed:
  • Ryan Kim
  • Justin H. Leung
  • Ariel Weinberger

Abstract

This paper investigates how immigration affects consumer prices. Using scanner data and instrumenting county-level immigration with historical ancestry patterns, we find that an inflow of 10,000 immigrants lowers four-year price growth by 0.58 percentage points. Leveraging variation in firm exposure through sales versus production locations, we show price declines stem entirely from the product demand channel: firms lower prices in response to immigrants in sales markets, not production locations. Evidence suggests that immigrants search more intensively, exhibit higher demand elasticity, pay lower prices for identical products, and shift expenditure toward lower-appeal products — consistent with a model of heterogeneous price sensitivity.

Suggested Citation

  • Ryan Kim & Justin H. Leung & Ariel Weinberger, 2026. "Prices and Immigration: A Firm Level Analysis," CESifo Working Paper Series 12588, CESifo.
    • Handle: RePEc:ces:ceswps:_12588
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    References listed on IDEAS

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    1. Semih Tumen, 2016. "The Economic Impact of Syrian Refugees on Host Countries: Quasi-experimental Evidence from Turkey," American Economic Review, American Economic Association, vol. 106(5), pages 456-460, May.
    2. Jonathan Vogel & Andreas Kostøl & Joan Monràs & Sigurd Galaasen, 2025. "The Labor Supply Curve is Upward Sloping: The Effects of Immigrant-Induced Demand Shocks," Working Papers 1496, Barcelona School of Economics.
    3. Cabral, James & Steingress, Walter, 2026. "Immigration and US shelter prices: The role of geographical and immigrant heterogeneity," European Economic Review, Elsevier, vol. 182(C).
    4. Michael A. Clemens & Jennifer Hunt, 2019. "The Labor Market Effects of Refugee Waves: Reconciling Conflicting Results," ILR Review, Cornell University, ILR School, vol. 72(4), pages 818-857, August.
    5. Gihoon Hong & John McLaren, 2015. "Are Immigrants a Shot in the Arm for the Local Economy?," NBER Working Papers 21123, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

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    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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