Estimating US Consumer Gains from Chinese Imports

36 Pages Posted: 30 May 2019

See all articles by Liang Bai

Liang Bai

University of Edinburgh

Sebastian Stumpner

University of Montreal - Department of Economics; Banque de France

Date Written: May 2019

Abstract

We estimate the size of US consumer gains from Chinese imports during 2004-2015. Using barcode-level price and expenditure data, we construct inflation rates under CES preferences, and use Chinese exports to Europe as an instrument. We find significant negative effects of Chinese imports on US prices. This effect is driven by both changes in the prices of existing goods and the entry of new goods and it is similar across consumer groups by income or region. A simple benchmarking exercise suggests that Chinese imports led to a 0.19 ppt annual reduction in the price index for consumer tradables.

Keywords: Chinese Import Penetration, Consumer Gains

JEL Classification: F14

Suggested Citation

Bai, Liang and Stumpner, Sebastian and Stumpner, Sebastian, Estimating US Consumer Gains from Chinese Imports (May 2019). Banque de France Working Paper No. 718, Available at SSRN: https://ssrn.com/abstract=3383907 or http://dx.doi.org/10.2139/ssrn.3383907

Liang Bai

University of Edinburgh ( email )

Old College
South Bridge
Edinburgh, Scotland EH8 9JY
United Kingdom

Sebastian Stumpner (Contact Author)

Banque de France ( email )

Paris
France

University of Montreal - Department of Economics ( email )

C.P. 6128, succursale Centre-Ville
Montreal, Quebec H3C 3J7
Canada

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