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Why do Pre-Tax Car Prices Differ so much Across European Countries?
Stockholm University, Faculty of Social Sciences, Institute for International Economic Studies.
World Trade Organisation, Geneva.
1995 (English)Report (Other academic)
Abstract [en]

The European car market is segmented by regulatory measures that support price discrimination by manufacturers and make consumer arbitrage difficult and costly. In a sample covering 43 models making up 80% of car sales in 11 countries in 1989-1992, we find that the average standard deviation of pre-tax prices across markets is 14%. The difference between the maximum price is typically about 50% of the average price. The price discrimination seems to be driven largely by taxes, tariffs and import quotas. For example, a quota raises the pre-tax price of the average Japanese car by 12% and of the average competing European car by 7%.

Place, publisher, year, edition, pages
Stockholm: IIES , 1995. , 30 p.
Seminar Paper / Institute for International Economic Studies, Stockholm University, ISSN 0347-8769 ; 591
Keyword [en]
price discrimination, market segmentation, voluntary export restraint
National Category
URN: urn:nbn:se:su:diva-41922OAI: diva2:343060
Available from: 2010-08-12 Created: 2010-08-12 Last updated: 2010-08-12Bibliographically approved

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Flam, Harry
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