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AN ANALYSIS OF INTERNATIONAL PRICE DIFFERENTIALS ON EBAY
Author(s) -
MAIER PHILIPP
Publication year - 2010
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.2009.00179.x
Subject(s) - economics , price dispersion , currency , homogeneous , monetary economics , differential (mechanical device) , price level , international economics , econometrics , physics , engineering , thermodynamics , aerospace engineering
Online auction sites like eBay provide ways to measure what consumers buy and how much they pay. Does this imply that consumers pay similar prices, irrespective of their location? Comparing prices for homogeneous, tradable goods in the euro area and the United Kingdom, we find that prices differ significantly. The differential is not related to countries' having different currencies. However, price dispersion—the variance of prices—does seem to be smaller if two countries share a common currency. Our results confirm the importance of national borders in explaining price differences and their magnitude is related to (not) sharing a common currency. ( JEL E30, E31, E50, F40)