NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Measuring the Unequal Gains from Trade

Pablo D. Fajgelbaum, Amit K. Khandelwal

NBER Working Paper No. 20331
Issued in July 2014
NBER Program(s):   ITI

Individuals that consume different baskets of goods are differentially affected by relative price changes caused by international trade. We develop a methodology to measure the unequal gains from trade across consumers within countries. The approach requires data on aggregate expenditures and parameters estimated from a non-homothetic gravity equation. We find that trade typically favors the poor, who concentrate spending in more traded sectors.

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This paper was revised on August 28, 2015

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Document Object Identifier (DOI): 10.3386/w20331

Published: Fajgelbaum, Pablo D. and Amit K. Khandelwal (2016), "Measuring the Unequal Gains from Trade," The Quarterly Journal of Economics, 131 (3): 1113-1180. citation courtesy of

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