Annual Forum Papers

Import Parity Pricing: A Competitive Constraint or a Source of Market Power?

  • Year: 2005
  • Author(s): Geoff Parr
  • Countries and Regions: South Africa

Pricing tradable goods in the domestic market at import parity is evaluated to determine whether it can be characterized as a competitive constraint on pricing, or as a source of market power. The policy of import parity pricing (IPP) is also assessed in terms of the South African Competition Act. Because IPP depends on so many variables, its effects are uneven across sectors and it so is difficult to condemn outright or to address via a policy measure.