Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/320093 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 11872
Publisher: 
CESifo GmbH, Munich
Abstract: 
To test the localized tastes hypothesis, we use historical dialect similarity as an instrument to predict the persistent component of regional taste differences. Analyzing wholesale markets for fruits and vegetables in Japan, we find that predicted taste differences have a strong, statistically significant effect, explaining approximately 9% of the mean volatility in law-of-one-price deviations. Our findings are robust across extensive validity checks, which scrutinize and relax our exclusion restriction, distinguishing between various sources of endogeneity, and confirm our baseline results based on alternative instruments, which exploit exogenous differences in agro-climatic endowments.
Subjects: 
market integration
tastes
culture
dialects
JEL: 
D12
F15
N75
Q11
R22
Z13
Document Type: 
Working Paper
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