Exchange Rate Shocks and Quality Adjustments

• 成果类型: Article
• 署名作者: Goetz, Daniel; Rodnyansky, Alexander
• 署名单位: University of Toronto; University Toronto Mississauga; University of Cambridge; Centre for Economic Policy Research - UK
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_01030
• 发表日期: 2023-01
• 页码: 86-100
• 关键词: rate pass-through; trade liberalization; international prices; multiproduct firms; export prices; PRODUCTIVITY; MARKET

摘要

Do firms respond to cost shocks by reducing the quality of their products? Using microdata from a large Russian retailer that refreshes its product line twice-yearly, we document that higher quality products are more profitable than lower quality ones, but that the number of high-quality products experiences a relative decrease after a large ruble devaluation in 2014. We show that rising firm costs-and not shrinking consumer incomes-explains the reallocation, and rationalize the data with a model that features consumer expenditure switching between high and low qualities. The reallocation to lower quality products reduces average pass-through by 26%.