Income differences and prices of tradables
By: Ina Simonovska
Contributors: National Bureau of Economic Research
Series: NBER working paper series -- working paper 16233; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16233.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "This paper presents novel evidence of price discrimination, using prices of identical goods in 28 countries.  I explain the observed phenomenon via non-homothetic preferences, in a model of trade with product differentiation and firm productivity heterogeneity.  The model brings theory and data closer along a key dimension: it generates positively related prices of tradables and income, while preserving exporter behavior and trade flows of existing frameworks.  It further captures observations that richer countries buy more per product and consume more diverse bundles.  Quantitatively, the model suggests that variable mark-ups account for 80% of the positive price-income relationship across 123 countries"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 9/2/2010.

Includes bibliographical references.

Also available in print.

System requirements: Adobe Acrobat Reader.

Mode of access: World Wide Web.