Trade-Inducing Quality Standards for Used Durables

Costas Hadjiyiannis () and Sofronis Clerides

No 4838, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We construct a theoretical framework to study the impact of asymmetric quality standards on used durable goods on trade flows, profits and consumer welfare. We show that asymmetry in quality standards generates trade in used goods from high to low standard countries while at the same time reducing trade in new goods. The industry in the exporting country benefits from this change while consumers lose out. Consumers in the importing country are the biggest beneficiaries, but domestic industry is hurt. These results suggest that quality standards on used goods are a powerful policy tool whose use should be monitored by the WTO.

Keywords: Quality standards; Durable goods; Used durables; Trade in used goods (search for similar items in EconPapers)
JEL-codes: F10 L10 (search for similar items in EconPapers)
Date: 2005-01
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (3)

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Working Paper: Trade-Inducing Quality Standards for Used Durables (2004)
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