On Measuring the Welfare Gains from Trade Under Consumer Heterogeneity
Bibliographic Data
| ID | 9704835 |
|---|---|
| Authors | Sergey Nigai (0000-0002-8152-5188, ETH Zurich, KOF and CESifo, corresponding author) |
| Year | 2016 |
| Volume | 126 |
| Issue | 593 |
| Pages | 1193-1237 |
| Publication date | 2016-06-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/ecoj.12192 |
| OpenAlex | W2054678524 |
| Language | EN |
| Citations received | 2 |
| References cited | 72 |
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
Deadweight loss · Econometrics · Economic surplus · Economics · International economics · Revenue · Tariff · Welfare · Economics of Agriculture and Food Markets · Fiscal Policy and Economic Growth · Global trade and economics
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| Unique citing works | 2 |
|---|---|
| Citations per year | 0,67 |
| Citation span | 2023 - 2025 (3) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 2 |