On Measuring the Welfare Gains from Trade Under Consumer Heterogeneity

• 成果类型: Article
• 署名作者: Nigai, Sergey
• 署名单位: Swiss Federal Institutes of Technology Domain; ETH Zurich; Leibniz Association; Ifo Institut
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/ecoj.12192
• 发表日期: 2016
• 页码: 1193-1237
• 关键词: world income-distribution; North-South trade; product quality; Nonhomothetic preferences; INTERNATIONAL-TRADE; intermediate inputs; Global economy; Data set; INEQUALITY; variety

摘要

I develop a multi-country, multi-industry model of trade that features heterogeneous consumers with non-homothetic preferences. I use the model to quantify the measurement errors in the welfare gains estimates caused by the assumption of a representative consumer (ARC). First, I reduce the world level of all trade costs by 15% and find that ARC overestimates (underestimates) the gains of the poor (rich) by up to 5 (11) percentage points. Second, I eliminate import tariffs around the globe and show that the loss of tariff revenues is not negligible for some consumers and that the measurement errors from ARC are between -15 and 4% points.