EconPapers    
Economics at your fingertips  
 

International trade, quality sorting and trade costs: the case of Cognac

Charlotte Emlinger () and Viola Lamani ()
Additional contact information
Charlotte Emlinger: CEPII
Viola Lamani: INRAE, UMR MOISA

Review of World Economics (Weltwirtschaftliches Archiv), 2020, vol. 156, issue 3, No 5, 579-609

Abstract: Abstract This paper tests empirically the validity of the Alchian and Allen effect stipulating that per-unit trade costs increase the relative demand for higher-quality goods. We use an original dataset of French Cognac exports by quality designations and estimate the impact of trade costs on the share of high quality Cognac. The definition of quality, based on the minimum time in oak of the youngest eau-de-vie (wine brandy) used in creating the blend, is objective and time-invariant, which makes the case of Cognac particularly relevant to analyze the impact of different trade costs on its quality mix. We investigate both the impact of distance and customs duties on Cognac’s quality mix, from 1996 to 2013, and the impact of a variation in trade costs, brought by the containerization of shipping, between 1969 and 2013. Our results confirm the presence of the Alchian and Allen effect.

Keywords: Quality mix; Luxury product; Distance; Tariffs (search for similar items in EconPapers)
JEL-codes: F10 F13 F14 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s10290-019-00372-z Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:weltar:v:156:y:2020:i:3:d:10.1007_s10290-019-00372-z

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10290/PS2

DOI: 10.1007/s10290-019-00372-z

Access Statistics for this article

Review of World Economics (Weltwirtschaftliches Archiv) is currently edited by Paul Bergin, Holger Görg, Cédric Tille and Gerald Willmann

More articles in Review of World Economics (Weltwirtschaftliches Archiv) from Springer, Institut für Weltwirtschaft (Kiel Institute for the World Economy) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2020-08-29
Handle: RePEc:spr:weltar:v:156:y:2020:i:3:d:10.1007_s10290-019-00372-z