Consumer taste in trade

Bee Yan Aw, Yi Lee and Hylke Vandenbussche

No 2020-15, Discussion Papers from University of Nottingham, GEP

Abstract: This paper documents the importance of consumer taste for the food industry using firm product level customs data by destination country. We identify consumer taste through the use of a control function approach and estimate it jointly with other demand parameters using a flexible demand specification. We fid that, on average, consumer taste explains about as much of the variation in export revenue as marginal costs. The contribution of consumer tastes to export revenue variation ranges from 2% to 30% depending on product category in the food industry. Our results also show that consumer taste decreases in distance but this relationship is non-monotonic.

Keywords: consumer taste; quality; productivity; exports; firm-product; food (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-agr and nep-int
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Citations: View citations in EconPapers (6)

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https://www.nottingham.ac.uk/gep/documents/papers/2020/gep-2020-15.pdf (application/pdf)

Related works:
Working Paper: Consumer Taste in Trade (2020)
Working Paper: Consumer Taste in Trade? (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:not:notgep:2020-15

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