Demand and distance: Evidence on cross-border shopping

Arbeitspapier

While many studies have documented deviations from the Law of One Price in international settings, evidence is scarce on the extent to which consumers take advantage of price differentials and engage in cross border shopping. We use data from 287 Swedish municipalities to estimate how responsive alcohol sales are to foreign prices, and relate the sensitivity to the location's distance to the border. Typical results suggest that the elasticity with respect to the foreign price is around 0.4 in the border region; moving 200 (400) kilometers inland reduces it to 0.2 (0.1). Given that cross country price differences for alcohol and other products are often caused by taxes, our evidence has implications for the debate on tax competition/harmonization.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: SSE/EFI Working Paper Series in Economics and Finance ; No. 587

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Economic Integration ; Taxation, Subsidies, and Revenue: General ; Intergovernmental Relations; Federalism; Secession ; Size and Spatial Distributions of Regional Economic Activity
• Thema: Law of one price ; tax competition ; tax harmonization ; cross border shopping ; European integration ; Grenzüberschreitender Verkehr ; Konsumentenverhalten ; Grenzgebiet ; Internationaler Preiszusammenhang ; Arbitrage Pricing ; Alkoholisches Getränk ; Steuerwettbewerb ; Schweden

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Asplund, Marcus ; Friberg, Richard ; Wilander, Fredrik
• Ereignis: Veröffentlichung
• (wer): Stockholm School of Economics, The Economic Research Institute (EFI)
• (wo): Stockholm
• (wann): 2005

Weitere Informationen

• Handle: http://hdl.handle.net/10419/56373
• Letzte Aktualisierung: 10.03.2025, 11:45 MEZ