Gains from trade in used goods: Evidence from automobiles
I 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.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
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.:
- David E. Weinstein & Christian Broda, 2004.
"Globalization And The Gains From Variety,"
Econometric Society 2004 Latin American Meetings
327, Econometric Society.
- David Weinstein & Christian Broda, 2004. "Globalization and the Gains from Variety," 2004 Meeting Papers 530, Society for Economic Dynamics.
- David Weinstein & Christian Broda, 2004. "Globalization and the Gains from Variety," Econometric Society 2004 North American Summer Meetings 508, Econometric Society.
- Christian Broda & David E. Weinstein, 2004. "Globalization and the gains from variety," Staff Reports 180, Federal Reserve Bank of New York.
- Christian Broda & David E. Weinstein, 2004. "Globalization and the Gains from Variety," NBER Working Papers 10314, National Bureau of Economic Research, Inc.
- Navaretti, Giorgio Barba & Soloaga, Isidro & Takacs, Wendy, 2000. "Vintage Technologies and Skill Constraints: Evidence from U.S. Exports of New and Used Machines," World Bank Economic Review, World Bank Group, vol. 14(1), pages 91-109, January.
- Grubel, Herbert G., 1980. "International trade in used cars and problems of economic development," World Development, Elsevier, vol. 8(10), pages 781-788, October.
- Amil Petrin, 2002. "Quantifying the Benefits of New Products: The Case of the Minivan," Journal of Political Economy, University of Chicago Press, vol. 110(4), pages 705-729, August.
- Garth Frazer, 2008. "Used-Clothing Donations and Apparel Production in Africa," Economic Journal, Royal Economic Society, vol. 118(532), pages 1764-1784, October.
- Bond, Eric W, 1983. "Trade in Used Equipment with Heterogeneous Firms," Journal of Political Economy, University of Chicago Press, vol. 91(4), pages 688-705, August.
- Pasquale Schiraldi, 2011.
"Automobile replacement: a dynamic structural approach,"
RAND Journal of Economics,
RAND Corporation, vol. 42(2), pages 266-291, 06.
- Pasquale Schiraldi, 2010. "Automobile Replacement: A DynamicStructural Approach," STICERD - Economics of Industry Papers 49, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Pasquale Schiraldi, 2008. "Automobile replacement: a dynamic structural approach," LSE Research Online Documents on Economics 21780, London School of Economics and Political Science, LSE Library.
- Trajtenberg, Manuel, 1989. "The Welfare Analysis of Product Innovations, with an Application to Computed Tomography Scanners," Journal of Political Economy, University of Chicago Press, vol. 97(2), pages 444-479, April.
- Paul M. Romer, 1993.
"New Goods, Old Theory, and the Welfare Costs of Trade Restrictions,"
NBER Working Papers
4452, National Bureau of Economic Research, Inc.
- Romer, Paul, 1994. "New goods, old theory, and the welfare costs of trade restrictions," Journal of Development Economics, Elsevier, vol. 43(1), pages 5-38, February.
- Levinsohn, J., 1991.
"Testing the Imports-As-Market-Discipline Hypothesis,"
272, Research Seminar in International Economics, University of Michigan.
- Levinsohn, James, 1993. "Testing the imports-as-market-discipline hypothesis," Journal of International Economics, Elsevier, vol. 35(1-2), pages 1-22, August.
- James Levinsohn, 1991. "Testing the Imports-as-Market-Discipline Hypothesis," NBER Working Papers 3657, National Bureau of Economic Research, Inc.
- Cardell, N. Scott, 1997. "Variance Components Structures for the Extreme-Value and Logistic Distributions with Application to Models of Heterogeneity," Econometric Theory, Cambridge University Press, vol. 13(02), pages 185-213, April.
- Francisco Rodriguez & Dani Rodrik, 1999.
"Trade Policy and Economic Growth: a Skeptic's Guide to the Cross-National Evidence,"
9912, Economic Research Forum, revised Apr 1999.
- Francisco Rodriguez & Dani Rodrik, 2001. "Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 261-338 National Bureau of Economic Research, Inc.
- Rodríguez, Francisco & Rodrik, Dani, 1999. "Trade Policy and Economic Growth: A Sceptic's Guide to the Cross-National Evidence," CEPR Discussion Papers 2143, C.E.P.R. Discussion Papers.
- M. A. M. Smith, 1976. "International Trade Theory in Vintage Models," Review of Economic Studies, Oxford University Press, vol. 43(1), pages 99-113.
- Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-890, July.
- Steven T. Berry, 1994. "Estimating Discrete-Choice Models of Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 242-262, Summer.
- Sofronis Clerides, 2004.
"Gains from Trade in Used Goods: Evidence from the Global Market for Automobiles,"
University of Cyprus Working Papers in Economics
6-2004, University of Cyprus Department of Economics.
- Clerides, Sofronis, 2005. "Gains From Trade in Used Goods: Evidence from the Global Market for Automobiles," CEPR Discussion Papers 4859, C.E.P.R. Discussion Papers.
- Danilo Pelletiere & Kenneth A. Reinert, 2004. "Used automobile protection and trade: Gravity and ordered probit analysis," Empirical Economics, Springer, vol. 29(4), pages 737-751, December.
- Harrison, Ann & Hanson, Gordon, 1999.
"Who gains from trade reform? Some remaining puzzles,"
Journal of Development Economics,
Elsevier, vol. 59(1), pages 125-154, June.
- Ann Harrison & Gordon Hanson, 1999. "Who Gains from Trade Reform? Some Remaining Puzzles," NBER Working Papers 6915, National Bureau of Economic Research, Inc.
- Clerides, Sofronis & Hadjiyiannis, Costas, 2008. "Quality standards for used durables: An indirect subsidy?," Journal of International Economics, Elsevier, vol. 75(2), pages 268-282, July.
- Susanna Esteban & Matthew Shum, 2007. "Durable-goods oligopoly with secondary markets: the case of automobiles," RAND Journal of Economics, RAND Corporation, vol. 38(2), pages 332-354, 06.
- Jorge Tovar, 2004. "The Welfare Effects Of Trade Liberalization: Evidence From The Car Industry In Colombia," DOCUMENTOS CEDE 003638, UNIVERSIDAD DE LOS ANDES-CEDE.
- Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
- Frank Verboven, 1996. "International Price Discrimination in the European Car Market," RAND Journal of Economics, The RAND Corporation, vol. 27(2), pages 240-268, Summer.
When requesting a correction, please mention this item's handle: RePEc:eee:inecon:v:76:y:2008:i:2:p:322-336. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.