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This Article studies the economic and legal causes that led to the formation of this peculiar phenomenon of uniform pricing for differentiated goods.
Building on the seminal paper by Rauch and Trindade (2002), a number of international studies show positive effects of skilled migrants on trade and FDI flows, especially for differentiated goods.
Egger et al. (2012) use a quasi-experimental approach for 100 countries between 1991 and 2000, showing that highly concentrated skilled (or unskilled) migrants induce higher trade flows – particularly for differentiated goods.
Peri and Requena (2010) focus on trade for Spanish provinces, 1995-2008, finding that immigration significantly raises trade – particularly for differentiated goods and for countries culturally distant from Spain.
Peri and Requena-Silvente (2010), using micro data on individual trade transactions from Spanish provinces between 1995 and 2008 and data on Spanish stock of immigrants, show that immigration promotes international trade mostly because it reduces the fixed costs of trade, especially for differentiated goods.
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Most business deals, however, involve differentiated goods and services, turning on factors like quality, convenience and reliability as well as price.
Third, import price rigidity has increased by ten percentage points, with increasing rigidity in differentiated goods prices.
However, he does not consider quality differentiated goods.
This paper examines the willingness for Korean consumers to pay a premium for renewable electricity under a differentiated good framework by applying the contingent valuation method.
Each individual consumes a variable amount of a non-differentiated good (which is used as the numeraire) and one unit of a differentiated good.
Olive oil is no longer a commodity or even a weakly differentiated good.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com