Decomposing firm-product appeal:How important is consumer taste ?

Bee Yan Aw (), Yi Lee () and Hylke Vandenbussche
Additional contact information
Bee Yan Aw: The Pennsylvania State University
Yi Lee: National Tsing Hua University

No 337, Working Paper Research from National Bank of Belgium

Abstract: We develop and structurally estimate a trade model in order to identify the importance of consumer taste. The model separates taste from quality and productivity (TFPQ) at the firm-product level. Export data by destination countries allow us to identify the level of taste from consumer heterogeneity across destinations. We decompose export revenue into the contribution of taste,quality and costs. We find that taste is very important and explains about 50 % of the variation in export revenue. Productivity (TFPQ) differences between firm-products become more prominent than taste in explaining export success only when the cost elasticity of improving quality is high.

Keywords: tastes; quality; productivity; exports; firm-product. (search for similar items in EconPapers)
JEL-codes: F12 F14 (search for similar items in EconPapers)
Pages: 65 pages
Date: 2018-03
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Decomposing Firm-Product Appeal: How important is Consumer Taste? (2018)
Working Paper: Decomposing firm-product appeal: how important is consumer taste? (2018)
Working Paper: Decomposing firm-product appeal: how important is consumer taste? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:nbb:reswpp:201803-337

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