Weight-Based Quality Specialization

33 Pages Posted: 19 Mar 2019

See all articles by Ahmad Lashkaripour

Ahmad Lashkaripour

Indiana University Bloomington - Department of Economics

Date Written: February 26, 2019

Abstract

I document that (i) there is great heterogeneity in the physical weight of traded goods even within narrowly-defined product categories; (ii) heavier goods are more costly to produce; (iii) heavier goods exhibit a systematically higher product appeal or quality; (iv) heavier goods are more costly to transport, and that (v) the cost of transportation increases more rapidly with unit weight than the cost of production. Using a basic model, I demonstrate that these observations entail that advanced economies specialize in the export of heavier goods, whereas geographi- cally distant economies specialize in the export of lighter goods (i.e., weight-based quality specialization). Micro-level trade data strongly support these predictions and suggest that weight-based quality specialization explains a significant portion of the cross-national variation in export prices and export quality.

Keywords: weight, price, quality, transport costs

Suggested Citation

Lashkaripour, Ahmad, Weight-Based Quality Specialization (February 26, 2019). Available at SSRN: https://ssrn.com/abstract=3342593 or http://dx.doi.org/10.2139/ssrn.3342593

Ahmad Lashkaripour (Contact Author)

Indiana University Bloomington - Department of Economics ( email )

Wylie Hall
Bloomington, IN 47405-6620
United States
8147774961 (Phone)

HOME PAGE: http://pages.iu.edu/~alashkar/

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