Explaining import quality: The role of the income distribution
Yo Chul Choi,
David Hummels () and
Chong Xiang ()
Journal of International Economics, 2009, vol. 78, issue 2, 293-303
We examine a generalized version of Flam and Helpman [Flam, H., Helpman, E., 1987. Vertical Product Differentiation and North-South Trade. American Economic Review, 77, 810-822.] in which consumption prices for quality differentiated goods are rising in household income. We provide propositions for aggregating this relationship across heterogenous households to map cross-country differences in income distributions to cross-country differences in import price distributions. The theoretical predictions are examined and confirmed using disaggregated data on prices of traded goods and micro data on household income from the Luxemburg Income Study. Country pairs with more similar income distributions have more similar import price distributions, whether similarity is measured by 1st-4th moment statistics, population and consumption shares within world income and product price quantiles, or income and price dis-similarity indices.
Keywords: Quality; differentiation; Income; distribution; Import; price; distribution; Luxemburg; Income; Study (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (102) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Journal Article: Explaining import quality: The role of the income distribution (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:78:y:2009:i:2:p:293-303
Access Statistics for this article
Journal of International Economics is currently edited by Gourinchas, Pierre-Olivier and RodrÃguez-Clare, AndrÃ©s
More articles in Journal of International Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().