BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
Assessing a feasible degree of product market integration. (A pilot analysis)
() and Darya Kulighina
Abstract: Perfect integration eludes the real world, so we suggest a
realistic benchmark standard for judging the extent of market integration
in various economies. We estimate the degree of integration in the US
product market, widely acknowledged to be the most integrated among
geographically large economies, so as to provide a reference for measuring
Russian market integration. Prices for 27 grocery items across 29 cities of
the United States in the first quarter of 2000 are used as empirical data.
The estimated degree of integration turns out to be very close to values
obtained for Russia for 2000. Apparently, market integration in Russia has
in recent years moved toward conditions found in advanced market economies.
The roles of other factors that could potentially cause segmentation of the
US market are also analyzed.
Keywords: market integration; price dispersion; law of one price; United States; Russia; (follow links to similar papers)
JEL-Codes: F14; F15; L81; R11; (follow links to similar papers)
29 pages, April 19, 2006
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- This paper is published as:
Gluschenko, Konstantin and Darya Karchevskaya (Kulighina), (2010), 'Assessing a feasible degree of product market integration: a pilot analysis', Journal of Economic Studies, Vol. 37, No. 4, pages 419-437
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