Measurement of export prices and changes in product quality

Inmaculada Martínez-Zarzoso and Celestino Burguet

International Advances in Economic Research, 2000, vol. 6, issue 4, 619-632

Abstract: In this paper, the economic theory of index numbers is applied to the construction of industry-level export price indices and export quality indices. These indices are used to make consistent comparisons of export prices and qualities at the same or different points in time. Evidence of quality change over time was found to be an important phenomenon in explaining the variation of unit value indices over time and across countries for some European Union trade flows. About half of the unit value differences among destination countries can be explained by quality differentials. The quality-corrected price indices are potentially useful in any empirical application in which accurate measures of export prices are needed. Copyright International Atlantic Economic Society 2000

Date: 2000
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DOI: 10.1007/BF02295373

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