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Price dispersion across Indian states: A club convergence analysis
Author(s) -
Jangam Bhushan Praveen,
Akram Vaseem,
Sahoo Pradipta Kumar
Publication year - 2021
Publication title -
journal of public affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.221
H-Index - 20
eISSN - 1479-1854
pISSN - 1472-3891
DOI - 10.1002/pa.2134
Subject(s) - convergence (economics) , price dispersion , economics , divergence (linguistics) , dispersion (optics) , convergence clubs , club , panel data , aggregate (composite) , econometrics , price level , macroeconomics , physics , optics , medicine , linguistics , philosophy , materials science , anatomy , composite material
This study examines the price convergence across 28 Indian states and 7 union territories at an aggregate and subgroups level over the period 2011–12 to 2017–18. We employ a novel approach of Phillips and Sul panel convergence technique, which accounts for transitional dynamics and heterogeneity in the panel. The results suggest price divergence and evidence of clubs across Indian states at both aggregate and subgroup level. The outcomes of this study help policymakers in addressing the price dispersion across states, which in turn improves the market integration, allocation of resources, and standard of living.