2013
DOI: 10.1016/j.jinteco.2013.02.002
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Exaggerated death of distance: Revisiting distance effects on regional price dispersions

Abstract: 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 conf… Show more

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Cited by 23 publications
(6 citation statements)
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“…Furthermore, inflation inertia, which has been observed in the national level data, is present in regional data as well. Thus, our findings complements previous studies (Kano et al, 2013;Nagayasu and Inakura, 2009) that have provided empirical evidence of heterogeneous price/inflation from Japanese regional data but which considered only the transaction costs.…”
Section: Resultssupporting
confidence: 86%
See 1 more Smart Citation
“…Furthermore, inflation inertia, which has been observed in the national level data, is present in regional data as well. Thus, our findings complements previous studies (Kano et al, 2013;Nagayasu and Inakura, 2009) that have provided empirical evidence of heterogeneous price/inflation from Japanese regional data but which considered only the transaction costs.…”
Section: Resultssupporting
confidence: 86%
“…Similarly, Ikeno (2014) reports evidence of transaction costs for non-durable and semi-durable goods. Furthermore, Kano et al, (2013) focus on the wholesale prices of eight vegetables and confirm that geographical barriers are the reason for the failure of the LOOP in Japan.…”
Section: Introductionmentioning
confidence: 76%
“…Kano et al. (2013) and Takechi (2015) use wholesale market data for fruits and vegetables to estimate a new economic geography model for Japan. Their estimates are about 3–5 for leaf vegetables (cabbage, Chinese cabbage, lettuce, spinach, and green onion) and nearly 2 for root vegetables (carrot and potato).…”
Section: Estimation Resultsmentioning
confidence: 99%
“…By contrast, Kano et al. (2013), Takechi (2015), and Ihara et al. (2015) estimate the elasticity of substitution among varieties in vegetable farming by means of a new economic geography model (Krugman, 1980), but do not combine their demand‐side estimates with firm heterogeneity incidence.…”
Section: Introductionmentioning
confidence: 99%
“…Regarding the market consumption price and home production consumption price, let single households consume a set of home production goods (n) and market consumption goods (c). Following Kano, Kano, and Takechi (2013), the home production consumption price (𝑝 𝑛 ) is defined as the weighted average of the commodity prices (𝑝 𝑗 ), and it is as…”
Section: Almost Ideal Demand System For Women and Menmentioning
confidence: 99%