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The Evolution of Cross-Region Price Distribution in Russia

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  • Konstantin Gluschenko

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Abstract

The behavior of the entire cross-section distribution of prices in Russian regions is analyzed from 1992 through 2000, using non-parametric techniques. The cost of a staples basket is used as a price representative. Price dispersion measured as the standard deviation of prices is found to be diminishing since about 1994; and the shape of the cross-region distribution of prices tends to be more regular over time. To characterize intra-distribution mobility, a transition probability function (stochastic kernel) is estimated. It is also used to derive a long-run limit of the price distribution. Overall, the results suggest that, excluding a few years following the price liberalization, price convergence has been happening among Russian regions.

Suggested Citation

  • Konstantin Gluschenko, 2004. "The Evolution of Cross-Region Price Distribution in Russia," William Davidson Institute Working Papers Series 2004-716, William Davidson Institute at the University of Michigan.
  • Handle: RePEc:wdi:papers:2004-716
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    File URL: http://deepblue.lib.umich.edu/bitstream/2027.42/40102/3/wp716.pdf
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    References listed on IDEAS

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    1. Steven T Phillips & Vincent Koen, 1993. "Price Liberalization in Russia; Behavior of Prices, Household Incomes, and Consumption During the First Year," IMF Occasional Papers 104, International Monetary Fund.
    2. Konstantin Gluschenko, 2004. "Analysing changes in market integration through a cross-sectional test for the law of one price," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 9(2), pages 135-149.
    3. Konstantin Gluschenko, 2003. "Market integration in Russia during the transformation years," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(3), pages 411-434, September.
    4. Vincent Koen & Steven T Phillips, 1992. "Price Liberalization in Russia; The Early Record," IMF Working Papers 92/92, International Monetary Fund.
    5. Berkowitz, Daniel & DeJong, David N. & Husted, Steven, 1998. "Quantifying Price Liberalization in Russia," Journal of Comparative Economics, Elsevier, vol. 26(4), pages 735-760, December.
    6. Paula De Masi & Vincent Koen, 1996. "Relative Price Convergence in Russia," IMF Staff Papers, Palgrave Macmillan, vol. 43(1), pages 97-122, March.
    7. Durlauf, Steven N. & Quah, Danny T., 1999. "The new empirics of economic growth," Handbook of Macroeconomics,in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 4, pages 235-308 Elsevier.
    8. Barry K. Goodwin & Thomas J. Grennes & Christine McCurdy, 1999. "Spatial price dynamics and integration in russian food markets," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 3(2), pages 157-193.
    9. Bianchi, Marco, 1997. "Testing for Convergence: Evidence from Non-parametric Multimodality Tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(4), pages 393-409, July-Aug..
    10. Paula De Masi & Vincent Koen, 1997. "Prices in the Transition; Ten Stylized Facts," IMF Working Papers 97/158, International Monetary Fund.
    11. Berkowitz, Daniel & DeJong, David N., 2003. "Regional integration: an empirical assessment of Russia," Journal of Urban Economics, Elsevier, vol. 53(3), pages 541-559, May.
    12. Daniel Berkowitz & David N. DeJong, 2001. "The evolution of market integration in Russia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 9(1), pages 87-104, March.
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    Citations

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    Cited by:

    1. Konstantin Gluschenko, 2016. "Distribution dynamics of Russian regional prices," Empirical Economics, Springer, vol. 51(3), pages 1193-1213, November.
    2. Konstantin Gluschenko, 2005. "Inter-Regional Price Convergence and Market Integration in Russia," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 11(4), pages 483-483, November.
    3. Gluschenko, Konstantin, 2006. "Russia's common market takes shape : price convergence and market integration among Russian regions," BOFIT Discussion Papers 7/2006, Bank of Finland, Institute for Economies in Transition.
    4. Konstantin Gluschenko, 2010. "Price mobility of locations," Applied Economics Letters, Taylor & Francis Journals, vol. 17(1), pages 99-103, January.

    More about this item

    Keywords

    price convergence; price dispersion; distribution dynamics; market integration; Russia;

    JEL classification:

    • 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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