Product Variety, the Cost of Living and Welfare Across Countries

Alberto Cavallo, Robert Feenstra and Robert Inklaar

No 28711, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use the structure of the Melitz (2003) model to compare the cost of living and welfare across countries, while incorporating product variety measured by the count of barcodes or firms. For 47 countries, we compare welfare relative to the United States to conventional measures of real consumption. Relative welfare is similar to or higher than that indicated by real consumption for a select group of nations in Europe and some large countries like China and Russia, but lower in most other countries. This qualitative pattern has some similarities to that found in Jones and Klenow (2016), but for very different reasons.

JEL-codes: E01 F12 (search for similar items in EconPapers)
Date: 2021-04
New Economics Papers: this item is included in nep-cis, nep-mac and nep-tra
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Citations: View citations in EconPapers (4)

Published as Alberto Cavallo & Robert C. Feenstra & Robert Inklaar, 2023. "Product Variety, the Cost of Living, and Welfare across Countries," American Economic Journal: Macroeconomics, vol 15(4), pages 40-66.

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