Globalisation, Income, and Welfare: Imported Goods Variety and Quality

Azémar, Céline, Rodolphe Desbordes and Markus Eberhardt

No 21731, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Did globalisation benefit consumers in poor countries? Using data on trade in goods for 138 countries, we measure the welfare gains from wider variety and higher quality of imported goods over the past quarter-century. The variety gains are large, a median 19 percent fall in the cost of living, and strongly pro-poor: poorer countries gained twice as much as richer ones. Because they derive from falling trade costs, variety gains made poor countries richer in real consumption even in the absence of income growth. Quality, by contrast, tracks income, and because income barely converged, neither did quality.

JEL-codes: D63 F14 F61 O19 (search for similar items in EconPapers)
Date: 2026-07
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