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Understanding international price differences using barcode data / Christian Broda, David E. Weinstein

Author
Broda, Christian M. (Christian Miguel), 1975-
Published
Cambridge, MA : National Bureau of Economic Research, [2008]
Copyright Date
©2008
Physical Description
34 pages, 19 unnumbered pages : illustrations ; 22 cm.
Additional Creators
Weinstein, David E. and National Bureau of Economic Research
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Summary
The empirical literature in international finance has produced three key results about international price deviations: borders give rise to flagrant violations of the law of one price, distance matters enormously for understanding these deviations, and most papers find that convergence rates back to purchasing power parity are inconsistent with the evidence of micro studies on nominal price stickiness. The data underlying these results are mostly comprised of price indexes and price surveys of goods that may not be identical internationally. In this paper, we revisit these three stylized facts using massive amounts of US and Canadian data that share a common barcode classification. We find that none of these three main stylized facts survive. We use our barcode level data to replicate prior work and explain what assumptions caused researchers to find different results from those we find in this paper. Overall, our work is supportive of simple pricing models where the degree of market segmentation across the border is similar to that within borders.
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Note
"May 2008."
Bibliography Note
Includes bibliographical references (pages 32-34).
Other Forms
Also available in PDF from the NBER World Wide Web site (www.nber.org).
View MARC record | catkey: 4680823