Abstract
To study the process of domestic market integration in Lao People’s
Democratic Republic (hereafter Lao PDR), this chapter explores the
spatial variation in beer prices and its relationship with transport costs and various local market characteristics. More specifically, we study how the price of a 640 ml bottle of Beer Lao varies across the country. In a well- integrated market, we expect the law of one price to hold. Controlling for transaction costs, a homogeneous product should have the same price throughout the market. Sellers trying to charge a higher price will find that potential buyers turn to competing suppliers.
Democratic Republic (hereafter Lao PDR), this chapter explores the
spatial variation in beer prices and its relationship with transport costs and various local market characteristics. More specifically, we study how the price of a 640 ml bottle of Beer Lao varies across the country. In a well- integrated market, we expect the law of one price to hold. Controlling for transaction costs, a homogeneous product should have the same price throughout the market. Sellers trying to charge a higher price will find that potential buyers turn to competing suppliers.
| Original language | English |
|---|---|
| Title of host publication | The Global Brewery Industry Markets, Strategies, and Rivalries |
| Editors | Jens Gammelgaard, Christoph Dörrenbächer |
| Publisher | Edward Elgar Publishing |
| ISBN (Print) | 978 1 78100 635 1 |
| Publication status | Published - 2013 |
Subject classification (UKÄ)
- Other Social Sciences