TY - JOUR AU - Choi,Yo Chul AU - Hummels,David AU - Xiang,Chong TI - Explaining Import Variety and Quality: The Role of the Income Distribution JF - National Bureau of Economic Research Working Paper Series VL - No. 12531 PY - 2006 Y2 - September 2006 UR - http://www.nber.org/papers/w12531 L1 - http://www.nber.org/papers/w12531.pdf N1 - Author contact info: Yo Chul Choi 403 West State St West Lafayette IN 47907-2056 E-Mail: choi35@purdue.edu David Hummels Krannert School of Management 403 West State Street Purdue University West Lafayette, IN 47907-1310 Tel: 765/494-4495 Fax: 765/494-9658 E-Mail: hummelsd@purdue.edu Chong Xiang Department of Economics Purdue University 403 West State Street West Lafayette, IN 47907-2506 Tel: 765/494-4499 Fax: 765/496-1778 E-Mail: cxiang@purdue.edu AB - We examine a generalized version of Flam and Helpman’s (1987) model of vertical differentiation that maps cross-country differences in income distributions to variations in import variety and price distributions. The theoretical predictions are examined and confirmed using micro data on income from the Luxemburg Income Study for 30 countries over 20 years. The pairs of importers whose income distributions look more similar have more export partners in common and more similar import price distributions. Similarly, the importers whose income distributions look more like the world buy from more exporters and have import price distributions that look more like the world. ER -