New Publication by Sarah Lein et al. in Journal of International Economics
"Cross-border shopping: Evidence and welfare implications for Switzerland"
Burstein, A.; Lein, S.; Vogel, J. (2024). "Cross-border shopping: Evidence and welfare implications for Switzerland". Journal of International Economics; https://doi.org/10.1016/j.jinteco.2024.104015
Abstract
Consumers access foreign goods by purchasing them domestically or shopping abroad. We present new facts on cross-border shopping by Swiss households showing, for example, that prices of identical products are lower in neighboring countries, cross-border shopping shares fall with distance to the border, and price gaps and cross-border shopping shares rose following the 2015 Swiss Franc appreciation. We use a simple model of cross-border shopping to quantify how variation across space in cross-border shopping results in heterogeneous changes in cost-of-living in response to changes in international prices such as the 2015 Swiss Franc Appreciation and the 2020 Covid-19-related closing of the border.