Goods Prices and Availability in Cities

• 成果类型: Article
• 署名作者: Handbury, Jessie; Weinstein, David E.
• 署名单位: University of Pennsylvania; National Bureau of Economic Research; Columbia University
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdu033
• 发表日期: 2015
• 页码: 258-296
• 关键词: monopolistic competition; TRADE; agglomeration; LAW

摘要

This article uses detailed barcode data on purchase transactions by households in 49 U.S. cities to calculate the first theoretically founded urban price index. In doing so, we overcome a large number of problems that have plagued spatial price index measurement. We identify two important sources of bias. Heterogeneity bias arises from comparing different goods in different locations, and variety bias arises from not correcting for the fact that some goods are unavailable in some locations. Eliminating heterogeneity bias causes 97% of the variance in the price level of food products across cities to disappear relative to a conventional index. Eliminating both biases reverses the common finding that prices tend to be higher in larger cities. Instead, we find that price level for food products falls with city size.