Price as an Indicator for Quality in International Trade?

This paper examines the relation between price differences and quality differences in an oligopoly model with intra-industry trade, where goods are horizontally as well as vertically differentiated. The analysis demonstrates that the ratio of prices is not linked to the ratio of qualities in any simple way. The paper therefore questions empirical trade studies using unit values as an indicator for the quality of the traded goods.

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Year of publication:	2008-01-01
Authors:	Hansen, Jørgen Drud ; Nielsen, Jørgen Ulff-Møller
Institutions:	Nationalökonomisk Institut, Institut for Økonomi
Subject:	Horizontal product differentiation \| Vertical product differentiation \| Intraindustry trade \| Price ratio \| Quality ratio \| Unit values

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series Working Papers Number 08-18 34 pages
Classification:	F12 - Models of Trade with Imperfect Competition and Scale Economies ; F13 - Commercial Policy; Protection; Promotion; Trade Negotiations
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10004992681