The price of distance: pricing-to-market and geographic barriers
研究贸易成本如何随地理距离变化，发现若不考虑生产者按市场定价和自选择偏差，距离对贸易成本的影响会被低估；使用微观数据证实地理壁垒对区域贸易的价格影响显著。
Abstract Trade costs contribute to price differentials across geographically separated regions. However, when using price differential data, the identification of distance-elastic trade costs depends on how producers set prices in remote markets. To address this problem, we first empirically demonstrate that a variable markup model is more relevant than a constant markup model to describe the data variation. We then adopt a nonhomothetic preference framework to consider pricing-to-market and self-selection bias to pin down the distance effect. If these factors are not accounted for, the distance elasticity of trade costs is small. However, by incorporating these mechanisms, our empirical analysis using micro-level data reveals that the distance effect is significantly large, suggesting that the price of geographic barriers to regional trade is high.