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Evaluating the law of one price using micro panel data

  • Laurent Gobillon

    ()

    (PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, INED - Institut national d'études démographiques)

  • François Charles Wolff

    ()

    (INED - Institut national d'études démographiques, LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - UN - Université de Nantes)

  • Patrice Guillotreau

    (INED - Institut national d'études démographiques, LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - UN - Université de Nantes)

This paper investigates spatial variations in product prices using an exhaustive micro dataset on fish transactions. The data record all transactions between vessels and wholesalers that occur on local fish markets in France during the year 2007. Spatial disparities in fish prices are sizable, even after fish quality, time, seller and buyer unobserved heterogeneity have been taken into account. The price difference between local fish markets can be explained to some extent by distance, but mostly by a coast effect (analogous to a border effect in the literature on the law of one price) related to separate location on the Atlantic and Mediterranean coasts. In particular, fish and crustacean prices are 34% higher on the Mediterranean coast. The law of one price is verified for almost all species when considering only local fish markets on the Atlantic coast.

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Paper provided by HAL in its series PSE Working Papers with number halshs-00849075.

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Date of creation: 30 Jul 2013
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Handle: RePEc:hal:psewpa:halshs-00849075
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  18. Patrice Guillotreau & Ramón Jiménez-Toribio, 2006. "The Impact of Electronic Clock Auction Systems on Shellfish Prices: Econometric Evidence from a Structural Change Model," Journal of Agricultural Economics, Wiley Blackwell, vol. 57(3), pages 523-546.
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