Royale with Cheese: Globalization, Tourism, and the Variety of Goods

15 Pages Posted: 3 Apr 2014

See all articles by Matthew T. Cole

Matthew T. Cole

Florida International University (FIU)

Ronald B. Davies

University College Dublin (UCD)

Date Written: May 2014

Abstract

The key result of the so‐called “New Trade Theory” is that countries gain from falling trade costs by an increase in the number of varieties available to consumers. Though the number of varieties in a given country rises, many models predict that global variety decreases as imported varieties drive out local varieties. This is potentially worrisome when consumers care about non‐exported foreign varieties as a result of tourism (especially when foreign varieties are highly desired). Since lowering trade costs induces additional firms to export and drives out some non‐exported varieties, these modifications result in welfare losses not accounted for in the existing literature. Nevertheless, improvements in non‐tourism consumption outweigh any such losses.

Suggested Citation

Cole, Matthew T. and Davies, Ronald B., Royale with Cheese: Globalization, Tourism, and the Variety of Goods (May 2014). Special Issue: Issues in Asia. Guest Editor: Laixun Zhao, Vol. 18, Issue 2, pp. 386-400, 2014, Available at SSRN: https://ssrn.com/abstract=2419771 or http://dx.doi.org/10.1111/rode.12091

Matthew T. Cole (Contact Author)

Florida International University (FIU) ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

Ronald B. Davies

University College Dublin (UCD) ( email )

Belfield
Belfield, Dublin 4 4
Ireland

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1
Abstract Views
283
PlumX Metrics