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On the Number and the Composition of Varieties

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  • Yasusada Murata

Abstract

I propose a simple general equilibrium model with nonhomothetic preferences and productivity differences and analyse the number and the composition of varieties in consumption. I obtain the following three results. First, population and labour efficiency have different roles in the income elasticity of demand, thus having different impacts on the number of final goods. Second, given the number of final goods, the composition of varieties is determined by the relative importance of desirability and technological feasibility of each final good. Finally, the equilibrium number and composition of final goods may not necessarily be the same as the optimal ones.

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  • Yasusada Murata, 2009. "On the Number and the Composition of Varieties," Economic Journal, Royal Economic Society, vol. 119(539), pages 1065-1087, July.
    • Handle: RePEc:wly:econjl:v:119:y:2009:i:539:p:1065-1087
    DOI: 10.1111/j.1468-0297.2009.02264.x
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    Cited by:

    1. Behrens, Kristian & Murata, Yasusada, 2012. "Globalization and individual gains from trade," Journal of Monetary Economics, Elsevier, vol. 59(8), pages 703-720.
    2. By Albert G. Schweinberger & Jens Suedekum, 2015. "De-industrialization and entrepreneurship under monopolistic competition," Oxford Economic Papers, Oxford University Press, vol. 67(4), pages 1174-1185.
    3. Foellmi, Reto & Hanslin Grossmann, Sandra & Kohler, Andreas, 2018. "A dynamic North-South model of demand-induced product cycles," Journal of International Economics, Elsevier, vol. 110(C), pages 63-86.
    4. Amandine Aubry, 2022. "Trade, access to varieties, and patterns of consumption," Review of International Economics, Wiley Blackwell, vol. 30(2), pages 369-400, May.
    5. Juan Carlos G. Lopez, 2019. "Cultural workers and the character of cities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 62(1), pages 211-246, February.
    6. Alexander Tarasov, 2014. "Preferences and income effects in monopolistic competition models," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 42(3), pages 647-669, March.
    7. Kristian Behrens & Yasusada Murata, 2012. "Globalization and Individual Gains from Trade (revised version)," Cahiers de recherche 1218, CIRPEE.

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