Borderplex Menu Evidence for the Law of One Price: A Convergence Approach

Posted: 27 Feb 2016

See all articles by Yong Bao

Yong Bao

Purdue University

Thomas M. Fullerton

University of Texas at El Paso - College of Business Administration

Donald D. Lien

University of Texas at San Antonio - College of Business - Department of Economics

Date Written: February 25, 2009

Abstract

A convergence approach is utilized to examine deviations from the law of one price. Sample data are menu prices for eight identical products sold by international restaurant franchises in Mexico and the United States. The results suggest mean reverting behaviour in real exchange rate movements in response to recent information.

Suggested Citation

Bao, Yong and Fullerton, Thomas M. and Lien, Donald, Borderplex Menu Evidence for the Law of One Price: A Convergence Approach (February 25, 2009). Applied Economics Letters, Vol. 16, No. 17, 2009, DOI: 10.1080/13504850701675516. Available at SSRN: https://ssrn.com/abstract=2738128

Yong Bao

Purdue University ( email )

Department of Economics
West Lafayette, IN 47907
United States

Thomas M. Fullerton (Contact Author)

University of Texas at El Paso - College of Business Administration ( email )

500 West University
Mail Code: 00543
El Paso, TX 79968-0545
United States
915-747-7747 (Phone)

Donald Lien

University of Texas at San Antonio - College of Business - Department of Economics ( email )

6900 North Loop 1604 West
San Antonio, TX 78249
United States
210-458-4313 (Phone)
210-458-4308 (Fax)

Register to save articles to
your library

Register

Paper statistics

Abstract Views
67
PlumX Metrics