Title: Analysis of Regional Price Differentiations
Abstract: This paper studies factors of differentiation of regional price levels in Russian regions. We tested the law of one price in 76 Russian regions for 69 goods on the monthly data for the period from 2003 to 2015. Based on econometric methods of panel data analysis, it was established that in the period 2000–2015, differences in regional prices were caused by the following factors: the Balassa — Samuelson effect; the costs of regional trade; the level of monopolization of retail trade. The results obtained in the article can be used in developing and implementing economic policy aimed at poverty reduction, since differences in the purchasing power of the same income in different regions of Russia create prerequisites for unforeseen changes in inequality. It is equally important to take into account regional price differences in assessing the efficiency of transport and logistics projects, since such projects can lead to a reduction in regional price differences due to lower interregional trade costs. The results are important in the development and analysis of the consequences of monetary policy. Decisions in the sphere of monetary policy are the same for all regions, however, due to regional price differentiation, their influence on inflation in individual regions may be different. Thus, accounting for price differences between regions can improve the accuracy of forecasting the consequences of monetary policy measures.
Publication Year: 2018
Publication Date: 2018-02-12
Language: en
Type: preprint
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