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A Hedonic Approach to Measuring Product Quality E ff ects of Ad-Valorem Tari ff s : the Specialty Cheese Case
| Content Provider | Semantic Scholar |
|---|---|
| Author | Macieira, João Grant, Jason |
| Copyright Year | 2010 |
| Abstract | This paper studies the effects of ad-valorem tariffs on imported cheese quality. Our starting point is a Gorman-Lancaster-style hedonic model of demand for differentiated products. We build on recent identification results for this type of models to nonparametrically estimate product quality using a panel of cheese imports. We use the quality estimates both to recover the equilibrium price function for cheese and to estimate the demand model using a recently developed nonparametric estimator for the distribution of random coefficients. The estimates facilitate counterfactual comparisons of how does consumer welfare and imported product quality vary across different tariff profiles. We find an inverse U-shape relationship between ad-valorem tariffs and equilibrium cheese quality. Consistent with this evidence, simulation results indicate that consumer welfare would decrease following a joint tariff rate cut by half. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://filebox.vt.edu/users/joaom07/TRQ_cheese_quality.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
