Intranational Price Convergence and Price Stickiness: Evidence from Denmark
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Intranational Price Convergence and Price Stickiness : Evidence from Denmark. / Bergman, Ulf Michael; Heebøll, Christian; Hansen, Niels Lynggaard.
I: Scandinavian Journal of Economics, Bind 120, Nr. 4, 2018, s. 1229-1259.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - Intranational Price Convergence and Price Stickiness
T2 - Evidence from Denmark
AU - Bergman, Ulf Michael
AU - Heebøll, Christian
AU - Hansen, Niels Lynggaard
PY - 2018
Y1 - 2018
N2 - We show that estimates of the half-life of deviations from LOOP are biased when not taking into account the precision when aggregating over types of goods. Using a comprehensive dataset with monthly price data for 124 homogeneous products across regions in Denmark over the period 1997–2010 we find a large positive aggregation bias. On average, we find that the half-life is 8.4 months when taking the bias into account compared to 28.7 months when applying the standard method. The heterogeneity in estimated half-life can be explained by price stickiness, distance between regions and whether the good is traded or non-traded.
AB - We show that estimates of the half-life of deviations from LOOP are biased when not taking into account the precision when aggregating over types of goods. Using a comprehensive dataset with monthly price data for 124 homogeneous products across regions in Denmark over the period 1997–2010 we find a large positive aggregation bias. On average, we find that the half-life is 8.4 months when taking the bias into account compared to 28.7 months when applying the standard method. The heterogeneity in estimated half-life can be explained by price stickiness, distance between regions and whether the good is traded or non-traded.
U2 - 10.1111/sjoe.12259
DO - 10.1111/sjoe.12259
M3 - Journal article
VL - 120
SP - 1229
EP - 1259
JO - Scandinavian Journal of Economics
JF - Scandinavian Journal of Economics
SN - 0347-0520
IS - 4
ER -
ID: 179591307