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The Long and Short (of) Quality Ladders

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Amit Khandelwal

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Abstract

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.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15178.

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Date of creation: Jul 2009
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Handle: RePEc:nbr:nberwo:15178

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Find related papers by JEL classification:
F1 - International Economics - - Trade
F15 - International Economics - - Trade - - - Economic Integration
F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Maurice Kugler & Eric Verhoogen, 2008. "The Quality-Complementarity Hypothesis: Theory and Evidence from Colombia," NBER Working Papers 14418, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Esteban Jaimovich & Vincenzo Merella, 2009. "The Role of Quality Ladders in a Ricardian Model of Trade with Nonhomothetic Preferences," City University Economics Discussion Papers 09/01, Department of Economics, City University, London. [Downloadable!]
    Other versions:
  3. Irene Brambilla & Amit Khandelwal & Peter Schott, 2007. "China's Experience Under the Multifiber Arrangement (MFA) and the Agreement on Textiles and Clothing (ATC)," NBER Working Papers 13346, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Juan Carlos Hallak & Peter K. Schott, 2008. "Estimating Cross-Country Differences in Product Quality," NBER Working Papers 13807, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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