NCPA - National Center for Policy Analysis


June 22, 2004

Economists at the National Bureau of Economic Research have estimated how much international trade has benefited American consumers simply through increased variety:

  • Consumers would be willing to pay $280 billion a year, or about 3 percent of gross domestic product, to have access to the variety of goods that were available in 2001, rather than what they could have bought in 1972.
  • From 1972 to 2001, the greatest gains in product variety occurred not in the 1990s but from 1972 to 1988, an era were major exporters such as South Korea and China liberalized their economies.

Americans are not the only consumers who are better off. Countries like China, Mexico, the former U.S.S.R. and Singapore enjoyed welfare gains resulting from greater product variety that are three to five times larger than those for the United States, say the economists.

Source: Virginia Postrel, "Economic Scene," New York Times, June 17, 2004 and Christian Broda and David Weinstein, "Globalization and the Gains from Variety," Federal Reserve Bank of New York, March 2004.

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