TY  - JOUR
AU  - Imbs,Jean
AU  - Mumtaz,Haroon
AU  - Ravn,Morten O.
AU  - Rey,Hélène
TI  - One TV, One Price?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15418
PY  - 2009
Y2  - October 2009
UR  - http://www.nber.org/papers/w15418
L1  - http://www.nber.org/papers/w15418.pdf
N1  - Author contact info:
Jean Imbs
Paris School of Economics
48 boulevard Jourdan
Paris 75014
E-Mail: jeanimbs@gmail.com

Haroon Mumtaz
Bank of England
London UK
E-Mail: hmumtaz@london.edu

Morten Ravn
Department of Economics
University College London
London WC1E 6BT
UK
E-Mail: m.ravn@ucl.ac.uk

Helene Rey
London Business School
Regents Park
London NW1 4SA
UNITED KINGDOM
Tel: 44 2070008412
E-Mail: hrey@london.edu
AB  - We use a unique dataset on television prices across European countries and regions to investigate the sources of differences in price levels. Our findings are as follows: (i) Quality is a crucial determinant of price differences. Even in an integrated economic zone as Europe, rich economies tend to consume higher quality goods. This effect accounts for the lion’s share of international price dispersion. (ii) Sizable international price differentials subsist even for the same television sets. The average bilateral price difference is as high as 80 euros, or 8% of the average TV price in our sample. (iii) EMU countries display lower price dispersion than non-EMU countries. (iv) absolute price differentials and relative price volatility are positively correlated with exchange rate volatility, but not with conventional measures of transport costs. (v) Importantly we show brand premia are sizable. They differ markedly across borders, in a way that does not correlate with transport costs, nor exchange rate movements. Taken together, the evidence is consistent firms exploiting market power through brand values to price discriminate across borders.
ER  -