Explaining Import Variety and Quality: the Role of the Income Distribution

David Hummels, Chong Xiang and Yo Chul Choi ()

No 541, LIS Working papers from LIS Cross-National Data Center in Luxembourg

Abstract: In this paper we examine whether a generalized version of Flam and Helpman’s (1987) model of vertical differentiation can reconcile three facts. One, countries import only a subset of available varieties. Two, import prices vary across exporters within narrow product categories. Three, US growth in both import variety and import price dispersion has occurred at the same time that the US income distribution has significantly widened. The generalized model maps cross-country differences in income distributions to variation in import variety and price variation. The theoretical predictions are examined and confirmed using panel data on import variety and prices, and detailed income distribution data from the Luxemborg Income Survey (LIS). Country pairs whose income distributions are growing more similar over time have growing similarity in the distribution of their import prices, and in the number of common export sources from which they buy.

Pages: 41 pages
Date: 2010-06
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in Journal of International Economics 77 (2009): 265-276.

Downloads: (external link)
http://www.lisdatacenter.org/wps/liswps/541.pdf (application/pdf)

Related works:
Working Paper: Explaining Import Variety and Quality: The Role of the Income Distribution (2006)
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:lis:liswps:541

Access Statistics for this paper

More papers in LIS Working papers from LIS Cross-National Data Center in Luxembourg Contact information at EDIRC.
Bibliographic data for series maintained by Piotr Paradowski ().