Working Paper: NBER ID: w22175
Authors: Mario J. Crucini; Gregor W. Smith
Abstract: We study the role of distance and time in statistically explaining price dispersion across 32 Swedish towns for 19 commodities from 1732 to 1914. The resulting large number of relative prices (502,689) allows precise estimation of distance and time effects, and their interaction. We find an effect of distance that declines significantly over time, beginning in the 18th century, well before the arrival of canals, the telegraph, or the railway.
Keywords: price dispersion; market integration; historical prices
JEL Codes: E37; F61; N70
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| distance (R12) | price dispersion (L11) |
| time (C41) | distance effect (R11) |
| improvements in transportation and communication (R42) | distance effect (R11) |