Regional Determinants of Grain Price Convergence in the Russian Empire

The paper examines regional determinants of grain price convergence in the Russian Empire in 1880-1913. I consider data of two levels of spatial aggregation: province and newly constructed district price data. I investigate that regional production factors, i.e. crop yield, difference in land use structures between peasants ad landowners, and grain loans impose the significant effect on the price convergence. Furthermore, I find significant neighborhood effects on the price dynamics across all regions. I test a hypothesis that possible heterogeneity of grain prices across local markets can be explained by fact of the elevator system erection and intense functioning of warehouses in some regions since 1888, which might be a sound proxy to the introduction of new railway system. Panel unit root test results show higher rates of convergence in regions with elevators and warehouses comparatively to all regions. Generally, the positive impact of a new technology on the regional price convergence is evident: prices started to converge faster over 1888-1913, during the construction of elevators, than they did over 1881-1887