Shipping the Good Apples Out: Alchian-Allen Theorem of Various Qualities

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Shipping the Good Apples Out: Alchian-Allen Theorem of Various Qualities

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Saito, Tetsuya

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Tetsuya Saito

Abstract

This paper explores conditions for which Alchian-Allen theorem–the finer quality product is relatively more purchased than the lower one in regions where additional costs are imposed–holds in models of various but finite qualities. In this paper, “finer qualities raise ratios to lower ones in response to transportation costs” defines the various qualities version of Alchian-Allen theorem. Then we find Alchian-Allen theorem holds if and only if consumptions of neighbor qualities are not so different and weighted averages of compensated elasticities by inverse of prices are decreasing in qualities. In order to provide plausible intuitions, some sufficiency conditions are also suggested.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 883.

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Date of creation: 09 Sep 2006
Date of revision: 20 Nov 2006
Handle: RePEc:pra:mprapa:883

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Find related papers by JEL classification:
F19 - International Economics - - Trade - - - Other
D00 - Microeconomics - - General - - - General

This paper has been announced in the following NEP Reports:

NEP-ALL-2006-12-04 (All new papers)

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.:

Irwin, Douglas A. & Temin, Peter, 2001. "The Antebellum Tariff On Cotton Textiles Revisited," The Journal of Economic History, Cambridge University Press, vol. 61(03), pages 777-798, September. [Downloadable!]
Other versions:
- Douglas A. Irwin & Peter Temin, 2000. "The Antebellum Tariff on Cotton Textiles Revisited," NBER Working Papers 7825, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Temin, Peter, 1988. "Product Quality and Vertical Integration in the Early Cotton Textile Industry," The Journal of Economic History, Cambridge University Press, vol. 48(04), pages 891-907, December. [Downloadable!]
Pritchett, Jonathan B & Chamberlain, Richard M, 1993. "Selection in the Market for Slaves: New Orleans, 1830-1860," The Quarterly Journal of Economics, MIT Press, vol. 108(2), pages 461-73, May. [Downloadable!] (restricted)

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This page was last updated on 2009-11-24.

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