Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/146387
Authors: 
Beck, Günter W.
Kotz, Hans-Helmut
Zabelina, Natalia
Year of Publication: 
2016
Series/Report no.: 
CFS Working Paper Series 536
Abstract: 
Studies employing micro price data to examine the extent of international goods market integration tend to find that borders induce arbitrage-impeding transaction costs which contribute to segment national markets. Analyzing household scanner price data from the three euro area countries Belgium, Germany and Netherlands, we document that Belgian households living in the vicinity of the border to Netherlands pay almost 10% more for the same good as their Dutch counterparts. German consumers on the other hand face prices that are on average up to around 3% smaller than those in the neighboring Netherlands. Counterfactual evidence for within-country price discontinuities provides no evidence of any existing border effects. The induced costs of crossing national borders amount to at least 13%. We also find evidence on border discontinuities in various household preference characteristics (such as demand elasticities and goods valuation) and household shopping patterns such as shopping frequencies.
Subjects: 
goods market integration
international price setting
border effects
price discrimination
demand elasticities
habit formation
scanner price data
JEL: 
D12
D40
F40
Document Type: 
Working Paper

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