The Evolution of Price Dispersion in China's Passenger Car Markets

19 Pages Posted: 16 Jul 2013

See all articles by Linhui Yu

Linhui Yu

Zhejiang University - College of Economics

Jiangyong Lu

Peking University

Pinliang Luo

Fudan University - School of Management

Date Written: July 2013

Abstract

This research identified the rising price dispersion of passenger cars in Chinese cities during the period from 2004 to 2006. The sources of the price differentials were then further explored. The theoretical and empirical analyses suggest that the income effect (as reflected by income differentials across Chinese cities) and the competition effect (as reflected by car supply differentials across Chinese cities) largely account for regional automobile price differentials across China.

Suggested Citation

Yu, Linhui and Lu, Jiangyong and Luo, Pinliang, The Evolution of Price Dispersion in China's Passenger Car Markets (July 2013). The World Economy, Vol. 36, Issue 7, pp. 947-965, 2013. Available at SSRN: https://ssrn.com/abstract=2294307 or http://dx.doi.org/10.1111/twec.12098

Linhui Yu

Zhejiang University - College of Economics

Yuquan Campus 38 Zheda Road
Hangzhou, Zhejiang 310027
China

Jiangyong Lu

Peking University ( email )

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871
China

Pinliang Luo

Fudan University - School of Management

No. 670, Guoshun Road
No.670 Guoshun Road
Shanghai, 200433
China

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