Income Distribution, Product Quality, and International Trade

• Tác giả: Pablo Fajgelbaum
• Ngôn ngữ: eng
• Ký hiệu phân loại: 341.75 International economic law
• Thông tin xuất bản: 2012
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 319202
• Chủ đề: 1. AGGREGATE DEMAND; 2. BASKET OF GOODS; 3. BILATERAL TRADE; 4. BRAND; 5. BRANDS

Tóm tắt

The authors develop a framework for studying trade in horizontally and vertically differentiated products. In their model, consumers with heterogeneous incomes and tastes purchase a homogeneous good and make a discrete choice of quality and variety of a differentiated product. The distribution of preferences generates a nested-logit demand structure such that the fraction of consumers who buy a higher-quality product rises with income. The model features a home-market effect that helps to explain why richer countries export higher-quality goods. It provides a tractable tool for studying the welfare consequences of trade and trade policy for different income groups in an economy.