Citation

Discussion Paper Details

Please find the details for DP12707 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Decomposing Firm-Product Appeal: How important is Consumer Taste?

Author(s): Bee Yan Aw-Roberts, Yi Lee and Hylke Vandenbussche

Publication Date: February 2018

Keyword(s): exports, firm-product, productivity, Quality and taste

Programme Area(s): International Trade and Regional Economics

Abstract: We develop and structurally estimate a trade model in order to identify the importance of consumer taste for exporters. The model separates taste from quality and productivity (TFPQ) at the firm-product level. Export data by destination countries allow us to identify the level of taste from consumer heterogeneity across destinations. We decompose export revenue into the contribution of taste, quality and costs. We find that taste is very important and explains about 50% of the variation in export revenue. Productivity (TFPQ) differences between firm-products become more prominent than taste in explaining export success only when the cost elasticity of improving quality is high.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12707

Bibliographic Reference

Aw-Roberts, B, Lee, Y and Vandenbussche, H. 2018. 'Decomposing Firm-Product Appeal: How important is Consumer Taste?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12707