Evaluating the Law of one Price Using Micro Panel Data: The Case of the French Fish Market

Journal article: This paper investigates spatial variations in product prices using an exhaustive micro dataset on fish transactions. The data includes all transactions between vessels and wholesalers that occurred within local fish markets in France during 2007. Spatial disparities in fish prices are sizable even after taking into account fish quality, time, and unobserved seller and buyer heterogeneity. The price difference between local fish markets can be explained to some extent by distance, but mostly by a coast effect related to market locations on the Atlantic and Mediterranean coasts. We also propose a new approach for identifying groups of interconnected local fish markets based on the activity of sellers and buyers within these markets. We show that most markets on the Atlantic coast are well connected, and that variation in prices across these markets is very small and in line with the law of one price.

Author(s)

Laurent Gobillon, François-Charles Wolff

Journal
  • American Journal of Agricultural Economics
Date of publication
  • 2016
Keywords JEL
L11 Q22 R32
Keywords
  • Commodity price
  • Disparities
  • Fish
  • Law of one price
  • Local markets
  • Nested fixed effects
  • Panel
  • Unobserved heterogeneity
Pages
  • 134-153
Version
  • 1
Volume
  • 98