Widespread empirical evidence of price discrimination in markets for goods and services suggests that national markets should be viewed as segmented rather than integrated. Yet, this research is almost entirely driven by studies of price setting behaviour in developed countries. This thesis extends the empirical literature by providing new evidence on price setting behaviour and product market integration in developing countries using a unique data set of monthly product prices at the retail outlet level or regional level for Lesotho, South Africa and Botswana over the period 2002 to 2009. The thesis is comprised of three main chapters: price setting behaviour in Lesotho: evidence from consumer retail price data; price setting behaviour and retail price inflation dynamics in Lesotho; and border effects, monetary agreements and product market integration.
