Analyzing differences in the quality of information-intensive goods may require information processing from consumers. Focusing on the differences between organic and conventional milk, we propose analyzing such markets using a tractable micro-founded discrete choice framework with Rational...

We develop a model of endogenous quality choice and trade that combines non-iceberg trade costs and non-homothetic preferences to capture the effect of importer-exporter income differences on geographic variation in quality and export prices. The differences in income substantially alter the...