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Price as an Indicator for Quality in International Trade?

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  • Wp 08-18

    Final published version, 259 KB, PDF document

This paper examines the relation between price differences and quality differences in an oligopoly model with intra-industry trade, where goods are horizontally as well as vertically differentiated. The analysis demonstrates that the ratio of prices is not linked to the ratio of qualities in any simple way. The paper therefore questions empirical trade studies using unit values as an indicator for the quality of the traded goods.
Original languageEnglish
Place of publicationAarhus
PublisherAarhus School of Business, Aarhus University, Department of Economics
Number of pages34
ISBN (Print)9788778823731
ISBN (Electronic)9788778823748
Publication statusPublished - 2008

    Research areas

  • Horizontal product differentiation, Vertical product differentiation, Intra-industry trade, Price ratio, Quality ratio, Unit values

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