IDEAS home Printed from https://ideas.repec.org/a/tpr/restat/v105y2023i4p910-930.html
   My bibliography  Save this article

Endogenous Vertical Differentiation, Variety, and the Unequal Gains from Trade

Author

Listed:
  • Gunnar Heins

    (University of Florida)

Abstract

How unequal are the gains from trade? This paper develops a structural framework to quantify the consequences of international trade on welfare of consumers across the income distribution, allowing for nonhomothetic demand and endogenous quality choices by firms. Using random coefficients demand estimation techniques, I infer demand and supply parameters, as well as household-specific price indexes for more than 3,000 distinct industries and find the gains from trade to be moderately unequal except in wealthier and small economies. Further, not accounting for endogenous vertical differentiation would overstate the impact of trade on cost-of-living inequality by close to 50%.

Suggested Citation

  • Gunnar Heins, 2023. "Endogenous Vertical Differentiation, Variety, and the Unequal Gains from Trade," The Review of Economics and Statistics, MIT Press, vol. 105(4), pages 910-930, July.
    • Handle: RePEc:tpr:restat:v:105:y:2023:i:4:p:910-930
    DOI: 10.1162/rest_a_01112
    as

    Download full text from publisher

    File URL: https://doi.org/10.1162/rest_a_01112
    Download Restriction: Access to PDF is restricted to subscribers.
    File URL: https://libkey.io/10.1162/rest_a_01112?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpr:restat:v:105:y:2023:i:4:p:910-930. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kelly McDougall (email available below). General contact details of provider: https://direct.mit.edu/journals .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.