TY  - JOUR
AU  - Hallak,Juan Carlos
AU  - Schott,Peter K.
TI  - Estimating Cross-Country Differences in Product Quality 
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13807
PY  - 2008
Y2  - February 2008
UR  - http://www.nber.org/papers/w13807
L1  - http://www.nber.org/papers/w13807.pdf
N1  - Author contact info:
Juan Carlos Hallak
Universidad de San Andrés
Departamento de Economía
Vito Dumas 284 (B1644BID)
Victoria, Provincia de Buenos Aires
ARGENTINA
Tel: (5411) 4725-7081
Fax: (5411) 4725-7010
E-Mail: jchallak@udesa.edu.ar

Peter K. Schott
Yale School of Management
135 Prospect Street
New Haven, CT 06520-8200
Tel: 203/436-4260
Fax: 203/432-6974
E-Mail: peter.schott@yale.edu
AB  - We develop a method for decomposing countries' observed export prices into quality versus quality-adjusted-price components using information contained in their trade balances. Holding observed export prices constant, countries with surpluses are inferred to offer higher quality than countries running deficits. Our method accounts for variation in trade balances induced by horizontal and vertical differentiation. We use our method to examine manufacturing product quality among the world's top exporters from 1989 to 2003. We find that the initial quality gap between high- and low-income countries is smaller than their initial income gap, and that the former narrows considerably faster over time.
ER  -