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Gains from Trade in Differentiated Products: Japanese Compact Trucks

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  • Robert C. Feenstra

Abstract

We present a methodology for estimating the welfare gains from a product with new characteristics, and apply it to Japanese and American compact trucks. Our approach can be used on any products for which a hedonic regression can be estimated. For 1979-80 we find average welfare gains of $500-600 per Japanese truck. In later years the benefit to consumers is reduced by the tariff on imports and the introduction of American compact models. American compacts have consumer gains which are much less than the average for Japanese models, since for each American compact there is an import with very similar characteristics.

Suggested Citation

  • Robert C. Feenstra, 1986. "Gains from Trade in Differentiated Products: Japanese Compact Trucks," NBER Working Papers 1978, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:1978
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    References listed on IDEAS

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    1. Robert C. Feenstra, 1984. "Voluntary Export Restraint in U.S. Autos, 1980-81: Quality, Employment, and Welfare Effects," NBER Chapters, in: The Structure and Evolution of Recent US Trade Policy, pages 35-66, National Bureau of Economic Research, Inc.
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    7. Bresnahan, Timothy F., 1981. "Departures from marginal-cost pricing in the American automobile industry : Estimates for 1977-1978," Journal of Econometrics, Elsevier, vol. 17(2), pages 201-227, November.
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    Cited by:

    1. James E. Rauch, 1996. "Trade and Search: Social Capital, Sogo Shosha, and Spillovers," NBER Working Papers 5618, National Bureau of Economic Research, Inc.
    2. Yves Bourdet, 1991. "Pricing policy and quality upgrading in the Swedish car market: Do import surveillance and exchange rate instability matter?," Open Economies Review, Springer, vol. 2(3), pages 255-274, October.

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