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Welfare gains from imported varieties in Spain, 1988-2006

Author

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  • Asier Minondo

    (Dpto. Economía)

  • Francisco Requena Silvente

    (Universitat de València)

Abstract

This paper investigates the welfare gains due to Spanish imports of new varieties over the period 1988-2006 using the methodology proposed by Feenstra (1994) and Broda and Weinstein (2006). After calculating the elasticities of substitution of a large number of Spanish imported products, we estimate that the total welfare gain due to imports of new varieties in Spain is equal to 1.2% of GDP in 2006 (a very conservative estimate). Next we decompose the contribution of each country to the total welfare gain. By countries, China accounts for about 12% of the total gain, almost the same as the entire EU-15. Este trabajo calcula las ganancias de bienestar generadas por la importación de nuevas variedades en España desde 1988 hasta 2006, utilizando la metodología propuesta originalmente por Feenstra (1994) y mejorada por Broda and Weinstein (2006). Después de calcular las elasticidades de substitución para más de 4500 categorías de productos importados, estimamos que la ganancia total de bienestar por importación de nuevas variedades en España equivale al 1,2% del PIB en 2006 (basado en una estimación muy conservadora). A continuación calculamos la contribución que cada país ha tenido a dicha mejora de bienestar: China acumula el 12% de la ganancia total, casi el mismo porcentaje que el conjunto de la UE-15.

Suggested Citation

  • Asier Minondo & Francisco Requena Silvente, 2010. "Welfare gains from imported varieties in Spain, 1988-2006," Working Papers. Serie EC 2010-12, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    • Handle: RePEc:ivi:wpasec:2010-12
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    References listed on IDEAS

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    2. Jacint Balaguer Coll & José C. Pernías, 2010. "Spatial density, average prices and price dispersion. Evidence from the Spanish hotel industry," Working Papers. Serie EC 2010-03, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
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    4. Maria Teresa Balaguer-Coll & Diego Prior & Emili Tortosa-Ausina, 2010. "Devolution Dynamics of Spanish Local Government," Environment and Planning A, , vol. 42(6), pages 1476-1495, June.
    5. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
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    Cited by:

    1. Xuan Dong Nguyen, 2014. "Effects of Japan's Economic Partnership Agreements on the Extensive Margin of International Trade," The International Trade Journal, Taylor & Francis Journals, vol. 28(2), pages 169-191, June.

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    More about this item

    Keywords

    welfare gains from trade; trade in variety; Spain.;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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