Inside the White Box: Unpacking the Determinants of Quality and Vertical Specialization

Esteban Jaimovich, Boryana Madzharova and Vincenzo Merella
Additional contact information
Boryana Madzharova: University of Erlangen-Nuremberg

No 620, School of Economics Discussion Papers from School of Economics, University of Surrey

Abstract: This paper explores patterns of quality differentiation and specialization relying on model-level panel data of retail sales and prices of refrigerators across 23 countries in the European Union. Unlike customs data aggregated at the product category, typically used in the literature, model-level data allow us to test for the presence of nonhomotheticities by comparing market shares of identical models across different markets. We measure quality at the model level, account for varying willingness-to- pay for quality at different levels of income, and link quality measures to objective model attributes. Using originally assembled data on the country of manufacture of each model, we study patterns of quality specialization by brands with plants in multiple countries. We find that _rms locate the production of their higher-quality models in richer countries, and argue that such patterns of quality specialization are driven mainly by a home-market effect linked to nonhomothetic preferences.

JEL-codes: F1 F14 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2020-12
New Economics Papers: this item is included in nep-opm
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://repec.som.surrey.ac.uk/2020/DP06-20.pdf (application/pdf)

Related works:
Journal Article: Inside the white box: Unpacking the determinants of quality and vertical specialization (2023)
Working Paper: Inside the white box: Unpacking the determinants of quality and vertical specialization (2021)
Working Paper: Inside the White Box: Unpacking the Determinants of Quality and Vertical Specialization (2021)
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:sur:surrec:0620

Access Statistics for this paper

More papers in School of Economics Discussion Papers from School of Economics, University of Surrey Contact information at EDIRC.
Bibliographic data for series maintained by Ioannis Lazopoulos ().