Price dispersion across Indian states: A club convergence analysis

Abstract

This study examines the price convergence across 28 Indian states and 7 union territories at an aggregate and subgroups level over the period 2011–12 to 2017–18. We employ a novel approach of Phillips and Sul panel convergence technique, which accounts for transitional dynamics and heterogeneity in the panel. The results suggest price divergence and evidence of clubs across Indian states at both aggregate and subgroup level. The outcomes of this study help policymakers in addressing the price dispersion across states, which in turn improves the market integration, allocation of resources, and standard of living.

A review of Phillips‐Sul approach‐based club convergence tests

“…More recently, researchers have also increasingly begun to analyse convergence in COVID-19 infections (e.g. Akram et al, 2021;Christopoulos et al, 2022;López-Mendoza et al, 2021;Meng, 2021).…”

“…Apergis & Payne, 2012; Kim & Rous, 2012; Montañés & Olmos, 2013; Montagnoli & Nagayasu, 2015; Blanco et al., 2016; Awaworyi Churchill et al., 2018; Apergis & Payne, 2019; Holmes, Otero et al., 2019; Tomal, 2019; Ganioğlu & Seven, 2021; Maynou et al., 2021; Cai et al., 2022; Tomal, 2022; Trojanek et al., 2022), consumer price index (e.g. Fritsche & Kuzin, 2011; Kim & Kim, 2015; Gozgor et al., 2019; Aginta, 2020, 2021; Jangam et al., 2021; Çakır & Gunduz, 2022), and total factor productivity (e.g. Hamit‐Haggar, 2013; Rath & Akram, 2019; Tica & Šikić, 2019; You et al., 2019).…”