Gains from trade in used goods: Evidence from automobiles

Sofronis Clerides

Journal of International Economics, 2008, vol. 76, issue 2, 322-336

Abstract: I investigate the welfare effects of trade liberalization by exploiting a natural policy experiment in the economy of Cyprus. A 1993 law relaxed import restrictions on used vehicles and enabled the importation of second-hand Japanese automobiles into the country. This led to a dramatic shift of consumer purchases from new to used cars and a substantial expansion of the overall market. Welfare gains computed from a structural demand system average $2000 per purchaser per year over a four-year period after the policy change. The findings are suggestive of the potential for substantial gains from liberalizing trade in used goods.

Keywords: Automobile; industry; Gains; from; trade; Used; goods; Trade; liberalization; Cyprus; F14; L13; L92 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (27)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:76:y:2008:i:2:p:322-336

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