We use the structure of the Melitz (2003) model to compare the cost of living and welfare across countries, while incorporating product variety measured by the count of barcodes or firms. For 47 countries, we compare welfare relative to the United States to conventional measures of real consumption. Relative welfare is similar to or higher than that indicated by real consumption for a select group of nations in Europe and some large countries like China and Russia, but lower in most other countries. This qualitative pattern has some similarities to that found in Jones and Klenow (2016), but for very different reasons.
Authors
- Acknowledgements & Disclosure
- We thank seminar participants at the NBER, Georgetown University, the University of Groningen and Yale University for helpful comments. We also thank Ninghui Li, Anna Ignatenko and Mingzhi Xu for their excellent research assistance. This research is supported by the NSF (US), SSHRC (Canada), and NWO (Netherlands) under a Digging into Data grant of the Trans-Atlantic Platform (NSF Award #1724649). The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
- DOI
- https://doi.org/10.3386/w28711
- Published in
- United States of America
