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N° 2009-14 |
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| July 2009 |
| Quality Sorting and Trade: Firm-Level Evidence for French Wine |
Matthieu Crozet
Keith Head
Thierry Mayer |
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| Firm-level regressions show that Champagne producers that receive better ratings from wine guides also
export to more markets, charge higher prices, and sell more in each market. Our method corrects for
a severe selection bias predicted by the model. By using direct measures of quality, we can recover
estimates of parameters from a Melitz-based model of heterogeneous firms. We then regress averages
of the quality, price, and quantity shipped to a country on measures of its attractiveness and entry costs.
Champagne exhibits quality-sorting: more attractive markets tend to have lower average qualities and
prices, but higher quantities. |
Non-technical summary  |
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Résumé
non-technique
en français |
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| Full text |
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| Gravity; heterogeneity; quality; trade |
Keywords |
| F12 |
JEL classification |
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