Goods market integration in Russia during the economic upturn

Abstract

This article finds an evolving pattern of goods market integration in Russia, considering the period of economic upturn since the second half of 2000 to the end of 2007. In an integrated market, the price of a tradable good at any location is determined by the national market, not local demand. Based on this, the strength of dependence of local prices on local demand is used to detect and measure market segmentation. The costs of a staples basket across almost all Russian regions with a monthly frequency are used as the empirical material. The pattern found suggests that over the time span under consideration the degree of Russia's goods market integration was relatively stable, fluctuating around some level; no significant improvements or deteriorations were detected.

Acknowledgements

I am grateful to participants at the 65th International Atlantic Economic Conference, especially to Edward M. Jankovic, for helpful comments.