Gains from trade in used goods: Evidence from automobiles
AbstractI investigate the welfare effects of trade liberalization by exploiting a natural policy experiment in the economy of Cyprus. A 1993 law relaxed import restrictions on used vehicles and enabled the importation of second-hand Japanese automobiles into the country. This led to a dramatic shift of consumer purchases from new to used cars and a substantial expansion of the overall market. Welfare gains computed from a structural demand system average $2000 per purchaser per year over a four-year period after the policy change. The findings are suggestive of the potential for substantial gains from liberalizing trade in used goods.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of International Economics.
Volume (Year): 76 (2008)
Issue (Month): 2 (December)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/505552
Automobile industry Gains from trade Used goods Trade liberalization Cyprus F14 L13 L92;
Find related papers by JEL classification:
- Aut - General Economics and Teaching - - - - -
- ind - - - - - -
- Gai - Financial Economics - - - - -
- fro - - - - - -
- tra - - - - - -
- Use - - - - - -
- goo - - - - - -
- Tra - - - - - -
- lib - - - - - -
- Cyp - Mathematical and Quantitative Methods - - - - -
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
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