On the size of home bias

Carlos Noton

Applied Economics, 2015, vol. 47, issue 2, 123-128

Abstract: Home bias in consumption refers to consumers strongly preferring domestic over foreign products. However, if the products were to be differentiated, would there then be a taste for country of origin? If this were the case, what would be the market shares if consumers were to only value prices and characteristics and not the brand's nationality? Using a structural demand, we account for home bias in the European car market and compute the counterfactual market shares in the absence of home bias. We find that home-biased preferences explain more than half of the market shares of domestic car manufacturers in their domestic markets, limiting the role of trade frictions.

Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2014.964832 (text/html)
Access to full text is restricted to subscribers.

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:taf:applec:v:47:y:2015:i:2:p:123-128

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2014.964832

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().