Price, Quality, and Variety: Measuring the Gains from Trade in Differentiated Products | Zendy

Gloria Sheu | Zendy

AI Assistant Blog Pricing

Home ZAIA Blog

Open Access

Price, Quality, and Variety: Measuring the Gains from Trade in Differentiated Products

Author(s) -

Gloria Sheu

Publication year - 2014

Publication title -

american economic journal applied economics

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 12.996

H-Index - 82

eISSN - 1945-7782

pISSN - 1945-7790

DOI - 10.1257/app.6.4.66

Subject(s) - variety (cybernetics) , quality (philosophy) , economics , liberalization , welfare , international economics , business , market economy , computer science , epistemology , artificial intelligence , philosophy

This paper explores the gains from trade in differentiated products from three channels: decreases in price, improvements in quality, and increases in variety. Using data on Indian imports of computer printers from 1996 to 2005, a period of trade liberalization, I find that quality was the leading source of welfare gains. Consumers would require a 65 percent decrease in all 1996 prices to be as well off as they were with the quality available in 2005. The contribution of price was slightly smaller, while variety lagged farther behind. These effects varied across buyers, as gains were largest for small businesses.

The content you want is available to Zendy users.

Already have an account? Click here to sign in.

Having issues? You can contact us here

Accelerating Research