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Identifier to cite or link to this item: https://hdl.handle.net/10086/25529

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Title
The Price of Distance: Producer Heterogeneity, Pricing to Market, and Geographic Barriers
Creator
Creator Name
Kano, Kazuko Kano, Kazuko
加納, 和子 加納, 和子
Affiliation
Affiliation Name
University of Tokyo
Creator Name
Kano, Takashi Kano, Takashi
加納, 隆 加納, 隆
Affiliation
Affiliation Name
Hitotsubashi University
Creator Name
Takechi, Kazutaka Takechi, Kazutaka
武智, 一貴 武智, 一貴
Affiliation
Affiliation Name
Hosei University
Key Word
Law of one price
Transportation costs
Geographic barriers
Producer heterogeneity
Pricing to market
JEL
F11
F14
F41
Abstract (distribution restricted)
This study investigates the effect of distance on price differentials across regions. To identify the distance effect, we need to incorporate producer heterogeneity and pricing-to-market behavior. Because geographic barriers alter the threshold levels of productivity to set a positive price across markets, the effect of distance on price differentials can be underestimated if heterogeneity and pricing to market are not accounted for. By incorporating these factors, empirical analysis using micro-level data reveals that the distance effect is significantly large, suggesting that the price of geographic barriers is still high for regional transportation.
Publisher
Graduate School of Economics, Hitotsubashi University
Issued Date
2013-03
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
Discussion papers ; No. 2013-03
Number of Pages
21
Appears in Collections
Discussion papers / Graduate School of Economics, Hitotsubashi University
URL
https://hdl.handle.net/10086/25529