TY - JOUR
T1 - Exaggerated death of distance
T2 - Revisiting distance effects on regional price dispersions
AU - Kano, Kazuko
AU - Kano, Takashi
AU - Takechi, Kazutaka
N1 - Funding Information:
We would like to thank the editor Charles Engel, the two anonymous referees, Naohito Abe, Kazumi Asako, Martin Berka, Andrew Bernard, Toni Braun, Mario Crucini, Alexandre Dmitriev, Wei Dong, Shin-ichi Fukuda, Chris Hajzler, Mathias Hoffmann, Naoto Jinji, Daiji Kawaguchi, Michael Keane, Junko Koeda, Chul-In Lee, Shiko Maruyama, Yoshiro Miwa, Hideyuki Mizobuchi, Toshi Mukoyama, Jim Nason, Makoto Nirei, Hiroshi Ohashi, Glenn Otto, Ke Pang, John Rogers, Makoto Saito, Yasuyuki Sawada, Moto Shintani, Shigenori Shiratsuka, Alexandre Skiba, Gregor Smith, Yi-Chan Tsai, Takayuki Tsuruga, Tsutomu Watanabe, Fabrizio Zilibotti, and the seminar participants in Hitotsubashi University, Hong Kong University of Science and Technology, Hosei University, Keio University, Kyoto University, University of New South Wales, Seoul National University, Shanghai University of Finance and Economics, University of Zurich, the Bank of Japan, the Institute of Developing Economies of the Japan External Trade Organization, the National Graduate Institute for Policy Study Japan, the Policy Research Institute of the Ministry of Finance of the Government of Japan, the Research Institute of Capital Formation of the Development Bank of Japan, the 2010 Asia Pacific Trade Seminar, the fifth conference of Empirical Investigations in Trade and Investment, the 2011 Canadian Economic Association Meetings, the 2011 North American Summer Meetings of the Econometric Society, the 2011 Spring Meetings of the Japanese Economics Association, the 2010 Summer Workshop on Economic Theory, and the 2010 Tokyo Macro Workshop for their helpful, valuable, and encouraging comments, discussions, and suggestions. The first and second authors wish to thank the Kikawada Foundation and the Japan Center for Economic Research for the financial support. The second and third authors would like to thank the Japan Society for the Promotion of Science for the financial support from grants-in-aid for scientific research (numbers 20730205 and 24530270 ). We are solely responsible for any errors and misinterpretations of this paper.
PY - 2013/7
Y1 - 2013/7
N2 - This paper empirically establishes the significant roles of transport costs in price dispersions across regions. We identify and estimate the iceberg-type distance-elastic transport costs as a parameter of a structural model of cross-regional price differentials featuring product delivery decisions. Utilizing a data set of wholesale prices and product delivery patterns of agricultural products in Japan, our structural estimation approach finds large distance elasticities of the transport costs. The result confirms that geographical barriers are an economically significant contributor to the failures of the law of one price.
AB - This paper empirically establishes the significant roles of transport costs in price dispersions across regions. We identify and estimate the iceberg-type distance-elastic transport costs as a parameter of a structural model of cross-regional price differentials featuring product delivery decisions. Utilizing a data set of wholesale prices and product delivery patterns of agricultural products in Japan, our structural estimation approach finds large distance elasticities of the transport costs. The result confirms that geographical barriers are an economically significant contributor to the failures of the law of one price.
KW - Agricultural wholesale price
KW - Geographical distance
KW - Law of one price
KW - Regional price dispersion
KW - Sample-selection bias
KW - Transport cost
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U2 - 10.1016/j.jinteco.2013.02.002
DO - 10.1016/j.jinteco.2013.02.002
M3 - Article
AN - SCOPUS:84879250514
SN - 0022-1996
VL - 90
SP - 403
EP - 413
JO - Journal of International Economics
JF - Journal of International Economics
IS - 2
ER -