Measuring the Unequal Gains from Trade

Pablo Fajgelbaum () and Amit Khandelwal

The Quarterly Journal of Economics, 2016, vol. 131, issue 3, 1113-1180

Abstract: Individuals that consume different baskets of goods are differentially affected by relative price changes caused by international trade. We develop a methodology to measure the unequal gains from trade across consumers within countries. The approach requires data on aggregate expenditures and parameters estimated from a nonhomothetic gravity equation. We find that trade typically favors the poor, who concentrate spending in more traded sectors. JEL Codes: D63, F10, F60.

Date: 2016
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Related works:
Working Paper: Measuring the Unequal Gains from Trade (2014)
Working Paper: Measuring the Unequal Gains From Trade (2013)
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