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Evaluating the law of one price using micro panel data

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  • Gobillon, Laurent
  • Wolff, François-Charles
  • Guillotreau, Patrice

Abstract

This paper investigates spatial variations in product prices using an exhaustive micro dataset on fish transactions. The data record all transactions between vessels and wholesalers that occur on local fish markets in France during the year 2007. Spatial disparities in fish prices are sizable, even after fish quality, time, seller and buyer unobserved heterogeneity have been taken into account. The price difference between local fish markets can be explained to some extent by distance, but mostly by a coast effect (analogous to a border effect in the literature on the law of one price) related to separate location on the Atlantic and Mediterranean coasts. In particular, fish and crustacean prices are 34% higher on the Mediterranean coast. The law of one price is verified for almost all species when considering only local fish markets on the Atlantic coast.

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  • Gobillon, Laurent & Wolff, François-Charles & Guillotreau, Patrice, 2013. "Evaluating the law of one price using micro panel data," CEPR Discussion Papers 9586, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:9586
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    1. Laurent Gobillon & François-Charles Wolff, 2015. "Évaluer l’effet des politiques publiques locales avec les contrôles synthétiques et les modèles à facteurs : Une application au marché du poisson français," PSE Working Papers halshs-01183455, HAL.

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    More about this item

    Keywords

    Fish; Commodity price; Local markets; Panel data;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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