Pricing-to-Market: Price Discrimination or Product Differentiation?
| dc.creator | Lavoie, Nathalie | |
| dc.creator | Liu, Qihong | |
| dc.date | 2017-04-01T14:08:28Z | |
| dc.date.accessioned | 2026-07-09T09:05:13Z | |
| dc.description | We employ a vertical differentiation model to examine the potential bias in pricing-to-market (PTM) results when using unit values aggregating differentiated products. Our results show that: i) false evidence of PTM (“pseudo PTM”) is always found when using unit values, whether the law of one price holds or not; and ii) the extent to which results are biased due to pseudo PTM increases with the level of product differentiation. Correspondingly, our simulation results suggest that: i) it is possible to get a statistically significant estimate of the exchange rate coefficient, even when there is no real PTM; ii) the probability of a false PTM finding increases with product differentiation. Pseudo PTM is the result of a change in the mix of qualities imported when the exchange rate changes. | |
| dc.identifier | doi:10.22004/ag.econ.201544 | |
| dc.identifier | https://ageconsearch.umn.edu/record/201544/files/wp2004-3.pdf | |
| dc.identifier | http://ageconsearch.umn.edu/record/201544 | |
| dc.identifier.uri | http://hdl.handle.net/123456789/605571 | |
| dc.language | eng | |
| dc.publisher | ||
| dc.source | http://ageconsearch.umn.edu/record/201544 | |
| dc.title | Pricing-to-Market: Price Discrimination or Product Differentiation? | |
| dc.type | Text |