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Price Dispersion across U.S. Districts of Entry

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  • Hakan Yilmazkuday

    () (Department of Economics, Florida International University)

Abstract

This paper investigates the price dispersion of U.S. imports at the good-category level across U.S. districts of entry. Although there is a large heterogeneity across goods, on average, the implied markups of a simple model explain about 31% of the price dispersion, while the implied marginal costs of production explain about 69%; the effects of trade costs, for which we have actual data, are almost none. The results are robust to the consideration of possible endogeneity problems, multiplicative versus additive trade costs, and measurement errors in prices.

Suggested Citation

  • Hakan Yilmazkuday, 2014. "Price Dispersion across U.S. Districts of Entry," Working Papers 1405, Florida International University, Department of Economics.
  • Handle: RePEc:fiu:wpaper:1405
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    File URL: http://economics.fiu.edu/research/working-papers/2014/1405/1405.pdf
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    References listed on IDEAS

    as
    1. Ina Simonovska, 2009. "Income Differences and Prices of Tradables," 2009 Meeting Papers 692, Society for Economic Dynamics.
    2. Engel, Charles & Rogers, John H, 1996. "How Wide Is the Border?," American Economic Review, American Economic Association, vol. 86(5), pages 1112-1125, December.
    3. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
    4. repec:oup:restud:v:82:y:2015:i:4:p:1612-1656. is not listed on IDEAS
    5. Behrens, Kristian & Murata, Yasusada, 2007. "General equilibrium models of monopolistic competition: A new approach," Journal of Economic Theory, Elsevier, vol. 136(1), pages 776-787, September.
    6. Yilmazkuday, Hakan, 2012. "Understanding interstate trade patterns," Journal of International Economics, Elsevier, vol. 86(1), pages 158-166.
    7. Ina Simonovska, 2015. "Income Differences and Prices of Tradables: Insights from an Online Retailer," Review of Economic Studies, Oxford University Press, vol. 82(4), pages 1612-1656.
    8. Isard, Peter, 1977. "How Far Can We Push the "Law of One Price"?," American Economic Review, American Economic Association, vol. 67(5), pages 942-948, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Yilmazkuday, Hakan, 2016. "Constant versus variable markups: Implications for the law of one price," International Review of Economics & Finance, Elsevier, vol. 44(C), pages 154-168.
    2. Liu, Yue, 2016. "Price dispersion across countries and the heterogeneous impacts of income differences," Economics Letters, Elsevier, vol. 140(C), pages 64-67.
    3. repec:bla:reviec:v:25:y:2017:i:3:p:649-676 is not listed on IDEAS
    4. repec:kap:jincot:v:17:y:2017:i:4:d:10.1007_s10842-017-0246-3 is not listed on IDEAS
    5. Hakan Yilmazkuday, 2017. "A Solution to the Missing Globalization Puzzle by Non-CES Preferences," Review of International Economics, Wiley Blackwell, vol. 25(3), pages 649-676, August.
    6. Flavio Delbono & Gemma Dipoppa & Luca Lambertini & Carlo Reggiani, 2017. "A Single Espresso, Please! Rationalizing Espresso Price Dispersion Across Italian Cities," Journal of Industry, Competition and Trade, Springer, vol. 17(4), pages 465-478, December.

    More about this item

    Keywords

    Price Dispersion; Variable Markups; Trade Costs;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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