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11.4国贸系Seminar：Income Distribution, New Consumers Margin and Variable Markup
发布时间：2014-10-22
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讲座题目： Income Distribution, New Consumers Margin and Variable Markup
演讲嘉宾： 刘悦 助理教授 中央财经大学国际经贸学院
主 持 人： 魏浩 北京师范大学国际经济与贸易系
讲座时间： 2014年11月4日（星期二） 下午3：30—5：00
讲座地点： 后主楼1620室
论文题目：
Income Distribution, New Consumers Margin and Variable Markup
论文摘要：
The price levels are generally different across countries, even for exactly identical tradable goods. This paper discusses the impact of income distribution on price levels through variable markups. We present a model with non-homothetic preference, heterogeneous agents in terms of different income levels, and many industries. In equilibrium, each individual endogenously determines the set of goods to consume, given his income level. For the goods not consumed by every one in the economy (defined as luxury goods), firms have incentives to lower the prices to reach more consumers (the new consumers margin). Therefore, firms face a trade-off between higher markups and bigger market size. When assuming income follows Pareto distribution, the model can be solved analytically. Two basic results are derived: (1) Given income inequality, higher average income levels induce higher prices for both the necessities (defined as goods consumed by each individual) and luxury goods, but has no impact on the relative prices of two luxury goods. However, the relative prices of luxury goods with respect to necessities decreases; (2) Given average income level, both the absolute and relative prices of the luxury goods are higher in more unequal economies. Empirical results for the prices of identical products sold across countries are consistent with the theoretical predictions. Potential issues of omitted variables are addressed.