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Hump-shaped cross-price effects and the extensive margin in cross-border shopping
Published 2019-07
VoxEU
Consumers often travel to neighbouring countries to shop at cheaper prices. This column uses sales data from a Norwegian grocery chain to examine how cross-border shopping into Sweden responds to changes in relative prices. It shows that the response to price changes is highest at some distance from the border, where consumers respond by reconsidering whether or not to travel abroad for their shopping.