Quality standards for used durables: An indirect subsidy?

Sofronis Clerides and Costas Hadjiyiannis ()

Journal of International Economics, 2008, vol. 75, issue 2, 268-282

Abstract: We construct a theoretical framework to study the impact of quality standards for used durable goods on trade [fl]ows, pro[fi]ts and consumer welfare. We show that asymmetric quality standards generate trade in used goods from high- to low-standard countries while at the same time reducing trade in new goods. Producers in the exporting country bene[fi]t from this change while consumers lose. In the importing country consumers are better off but domestic industry is hurt. These [fi]ndings suggest that quality standards on used goods may be a powerful policy tool whose use should be monitored by the WTO.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:75:y:2008:i:2:p:268-282

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