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Average income, income inequality and export unit values

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  • Hélène Latzer

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CEREC - Centre de recherche en économie - Université Saint-Louis - Bruxelles)

  • Florian Mayneris

    (UQAM - Université du Québec à Montréal = University of Québec in Montréal, CEPR - Center for Economic Policy Research)

Abstract

This paper analyses the relationship between a country's income distribution and its exports' unit values. Using bilateral export flows, we not only confirm the positive association between a country's average income and its export unit values, but further identify a heterogeneous relationship with income inequality: we find a greater income spread to be associated with higher export unit values in the case of poor countries only. These results are robust to the inclusion of controls for other determinants of export unit values, as well as to the use of alternative measures of income inequality and of the quality index. We finally discuss various theoretical rationalisations for this heterogeneous relationship between income inequality and the quality content of exports along the average income dimension, and show suggestive evidence that demand-side mechanisms can account for it, at least partly.

Suggested Citation

  • Hélène Latzer & Florian Mayneris, 2021. "Average income, income inequality and export unit values," Post-Print hal-03515766, HAL.
    • Handle: RePEc:hal:journl:hal-03515766
    DOI: 10.1016/j.jebo.2021.03.002
    Note: View the original document on HAL open archive server: https://paris1.hal.science/hal-03515766
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    Cited by:

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    2. Andrea Ciani, 2021. "Income inequality and the quality of imports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 157(2), pages 375-416, May.
    3. Ponce, Pablo & Yunga, Fernando & Larrea-Silva, Jhohana & Aguirre, Nikolay, 2023. "Spatial determinants of income inequality at the global level: The role of natural resources," Resources Policy, Elsevier, vol. 84(C).

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    More about this item

    Keywords

    Income distribu...; Export unit val...; Product quality...; Home market eff...;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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