search query: @indexterm INCOMES / total: 594
reference: 390 / 594
| Author: | Hunter, L. |
| Title: | The contribution of nonhomothetic preferences to trade |
| Journal: | Journal of International Economics
1991 : MAY, VOL. 30:3-4, p. 345-358 |
| Index terms: | INTERNATIONAL TRADE TRADE POLICY INCOMES INTERNATIONAL TRADE DEMAND |
| Language: | eng |
| Abstract: | Most models of trade have assumed that preferences in international trade are identical and homothetic. Little or no attention has been paid to the role of demand in determining trade patterns. The economic significance of preference nonhomotheticity is estimated extending the work of Hunter and Markusen (1988). Tastes are assumed to be identical, but budget shares depend on per capita income. A linear expenditure system is estimated for 34 countries over 11 commodity aggregates. A counterfactual exercise is conducted to estimate the volume of trade caused by deviations from homotheticity. The results indicate that nonhomothetic preferences may account for as much as one-quarter of interindustry trade flows. |
SCIMA