The Long and Short (of) Quality Ladders
No 15178, NBER Working Papers from National Bureau of Economic Research, Inc
Prices are typically used as proxies for countries' export quality. I relax this strong assumption by exploiting both price and quantity information to estimate the quality of products exported to the U.S. Higher quality is assigned to products with higher market shares conditional on price. The estimated qualities reveal substantial heterogeneity in product markets' scope for quality differentiation, or their "quality ladders.'' I use this variation to explain the heterogeneous impact of low-wage competition on U.S. manufacturing employment and output. Markets characterized by relatively shorter quality ladders are associated with larger employment and output declines resulting from low-wage competition.
JEL-codes: F1 F15 F16 (search for similar items in EconPapers)
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Published as Amit Khandelwal, 2010. "The Long and Short (of) Quality Ladders," Review of Economic Studies, Wiley Blackwell, vol. 77(4), pages 1450-1476, October.
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Journal Article: The Long and Short (of) Quality Ladders (2010)
Working Paper: The Long and Short (of) Quality Ladders (2007)
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