This study examines the extent of market integration within the West African sub-region using the theory of “law of one price”. The dataset covers three countries: Nigeria, Benin and Togo accounting for about three quarters of the sub-region economy. The data covers highly disaggregated retail level prices from the three countries and distance data between the three countries from 2011m1 to 2015m12. The results show that relative price dispersion within country is less than between countries. It is also shown that distance and border effects have positive and significant effects on price dispersion. The effects of distance became more significant as the magnitudes of the coefficients of border and distance increased after controlling for product, time and country pair effects. This result supports the hypothesis that product market integration in ECOWAS, like other developing regions, is weaker than in developed regions. This shows that there is the need to reduce the institutional constraints disrupting free flow of goods and services within the sub-region.
