Long and Short (of) Quality Ladders

Prices are typically used as proxies for countries' export quality. I relax this strong assumption by exploiting both price and quantity information to estimate the quality of products exported to the United States. Higher quality is assigned to products with higher market shares conditional on...

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Bibliographic Details
Published inThe Review of economic studies Vol. 77; no. 4; pp. 1450 - 1476
Main Author KHANDELWAL, AMIT
Format Journal Article
LanguageEnglish
Published Oxford Oxford, UK : Blackwell Publishing Ltd 01.10.2010
Wiley-Blackwell
Review of Economic Studies Ltd., Blackwell Publishing
Oxford University Press
Subjects
Coefficients
Competition
Employment
Exports
Imports
Industrial products
Industry
International trade
Ladders
Market prices
Market share
Product quality
Studies
United States > US
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Summary:Prices are typically used as proxies for countries' export quality. I relax this strong assumption by exploiting both price and quantity information to estimate the quality of products exported to the United States. Higher quality is assigned to products with higher market shares conditional on price. The estimated qualities reveal substantial heterogeneity in product markets' scope for quality differentiation, or their "quality ladders". I use this variation to explain the heterogeneous impact of low-wage competition on US manufacturing employment and output. Markets characterized by relatively short quality ladders are associated with larger employment and output declines resulting from low-wage competition.
Bibliography:http://dx.doi.org/10.1111/j.1467-937X.2010.00602.x
istex:7B33C8994EDB2EC23CB1484A64AE68AFC158406B
ark:/67375/HXZ-69BK1KW2-6
ISSN:0034-6527
1467-937X
DOI:10.1111/j.1467-937X.2010.00602.x