Premio Anual de Investigación Económica “Dr. Raúl Prebisch”

Measuring the Unequal Gains from Trade

Pablo Fajgelbaum

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2016-08-05 - 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 nonhomothetic gravity equation. We find that trade typically favors the poor, who concentrate spending in more traded sectors.