Recent developments in international trade theory have placed considerable and growing emphasis on the quality of the exported products, showing that it affects both the direction of trade and the countries' export performances. However, as quality is unobservable, a measurement problem clearly emerges. In this paper we review and apply some of the most recent methods developed in the international trade literature to estimate quality of traded products. We focus on the food sector, where the growing attention on quality and safety issues is leading to an increase in the demand for high quality products. In the first part of our empirical analysis, we investigate the properties of the estimated qualities, drawing some interesting results. In particular we find that, in contrast with what is often assumed in the literature, quality and prices are imperfectly correlated. The second empirical section is dedicated to the study of the relationship between price vs. quality and trade costs. What emerges is that, interestingly, the price and the quality of food exports are influenced differently by ad valorem and specific trade costs. Moreover, the magnitude of this relationship changes according to the level of product differentiation.

Price, quality and trade costs in the food sector / D. Curzi, L. Pacca. - In: FOOD POLICY. - ISSN 0306-9192. - 55(2015), pp. 147-158. [10.1016/j.foodpol.2015.06.007]

Price, quality and trade costs in the food sector

D. Curzi
;
L. Pacca
Ultimo
2015

Abstract

Recent developments in international trade theory have placed considerable and growing emphasis on the quality of the exported products, showing that it affects both the direction of trade and the countries' export performances. However, as quality is unobservable, a measurement problem clearly emerges. In this paper we review and apply some of the most recent methods developed in the international trade literature to estimate quality of traded products. We focus on the food sector, where the growing attention on quality and safety issues is leading to an increase in the demand for high quality products. In the first part of our empirical analysis, we investigate the properties of the estimated qualities, drawing some interesting results. In particular we find that, in contrast with what is often assumed in the literature, quality and prices are imperfectly correlated. The second empirical section is dedicated to the study of the relationship between price vs. quality and trade costs. What emerges is that, interestingly, the price and the quality of food exports are influenced differently by ad valorem and specific trade costs. Moreover, the magnitude of this relationship changes according to the level of product differentiation.
Food products; International trade; Quality estimates; Trade costs; Food Science; Economics and Econometrics; Development Education; Sociology and Political Science; Management, Monitoring, Policy and Law
Settore AGR/01 - Economia ed Estimo Rurale
   International comparisons of product supply chains in the agro-food sectors: determinants of their competitiveness and performance on EU and international markets
   COMPETE
   EUROPEAN COMMISSION
   FP7
   312029
2015
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2434/459677
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