“…Recent panel data studies include, among others, Lopez and Papell (2007), Funke and Koske (2008), Chortareas and Kapetanios (2009) and Hyrina and Serletis (2010). Although these studies utilize a couple of main currencies as base currencies, they obtain mixed results.…”
Section: Methodology and Test Proceduresmentioning
“…Recent panel data studies include, among others, Lopez and Papell (2007), Funke and Koske (2008), Chortareas and Kapetanios (2009) and Hyrina and Serletis (2010). Although these studies utilize a couple of main currencies as base currencies, they obtain mixed results.…”
Section: Methodology and Test Proceduresmentioning
“…4 Most recently, tests of LOP have found strong support for price convergence using panel unit root tests on the price differences for homogenous goods across numerous countries (e.g. Blander & Dhaene, 2012;Funke & Koske, 2008;Goldberg & Verboven, 2004Parsley & Wei, 1996). 5 The test provided by Blander and Dhaene (2012) is of particular relevance to this paper, since it is suitable for short panels.…”
spatial equilibrium values then individuals can benefit from changing locations. I examine whether the law holds for the hedonic price of rail access using a unique historical dataset for Berlin over the period 1890-1914, characterised by massive investment in the transport infrastructure. I estimate the hedonic price of rail access across multiple urban neighbourhoods and time periods to generate a panel dataset of hedonic price differences that I test for stationarity using a panel unit root test. Across multiple specifications I consistently fail to reject the null hypothesis of no unit root and accept the alternative hypothesis that the law holds. My estimates indicate a half-life for convergence to the law of one price that lies between 0.28 and 1.14 years. This result is consistent with spatial equilibrium.
“…First, whether nominal or real exchange rates are modeled does not seem to influence the result. Second, it seems that disaggregated sectoral data yield more reliable outcomes than aggregate or bilateral trade data (Funke and Koske 2008;Schmidt and Broll 2009). …”
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.