Replication data for: Pricing-to-Market and the Failure of Absolute PPP
Principal Investigator(s): View help for Principal Investigator(s) George Alessandria; Joseph P. Kaboski
Version: View help for Version V1
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Project Citation:
Alessandria, George, and Kaboski, Joseph P. Replication data for: Pricing-to-Market and the Failure of Absolute PPP. Nashville, TN: American Economic Association [publisher], 2011. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E114194V1
Project Description
Summary:
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We show that deviations from the law of one price in tradable goods are an important source of violations of absolute purchasing power parity. Using highly disaggregated export data, we document systematic international price discrimination: at the US dock, low-income countries pay lower prices. This pricing-to-market is about twice as important as local nontraded inputs for differences in tradable prices. We propose a model of consumer search and pricing-to-market in which consumers in low-income countries have a comparative advantage in nontraded, nonmarket search activities. Evidence from cross-country time-use studies and US export prices supports the model. (JEL E31, F14)
Scope of Project
JEL Classification:
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E31 Price Level; Inflation; Deflation
F14 Empirical Studies of Trade
E31 Price Level; Inflation; Deflation
F14 Empirical Studies of Trade
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