This paper explores the gains from trade in differentiated products
from three channels: decreases in price, improvements in quality,
and increases in variety. Using data on Indian imports of computer
printers from 1996 to 2005, a period of trade liberalization, I find
that quality was the leading source of welfare gains. Consumers
would require a 65 percent decrease in all 1996 prices to be as well
off as they were with the quality available in 2005. The contribution
of price was slightly smaller, while variety lagged farther behind.
These effects varied across buyers, as gains were largest for small
"Price, Quality, and Variety: Measuring the Gains from Trade in Differentiated Products."
American Economic Journal: Applied Economics,
Trade Policy; International Trade Organizations
Empirical Studies of Trade
Production, Pricing, and Market Structure; Size Distribution of Firms
Microelectronics; Computers; Communications Equipment
International Linkages to Development; Role of International Organizations