Price Dispersion across U.S. Districts of Entry

Abstract

This paper investigates the price dispersion of U.S. imports at the good-category level across U.S. districts of entry. Although there is a large heterogeneity across goods, on average, the implied markups of a simple model explain about 31% of the price dispersion, while the implied marginal costs of production explain about 69%; the e¤ects of trade costs, for which we have actual data, are almost none. The results are robust to the consideration of possible endogeneity problems, multiplicative versus additive trade costs, and measurement errors in prices.JEL Classi…cation: F12, F13, F14