Why are nontraded goods cheaper in poor countries?

dc.contributor.author Choi, Yoonho
dc.contributor.author Jin, Hailong
dc.contributor.author Choi, E. Kwan
dc.contributor.author Choi, E. Kwan
dc.contributor.department Economics
dc.date 2018-10-27T10:34:12.000
dc.date.accessioned 2020-06-30T02:08:49Z
dc.date.available 2020-06-30T02:08:49Z
dc.date.copyright Mon Jan 01 00:00:00 UTC 2018
dc.date.embargo 2019-03-28
dc.date.issued 2018-03-28
dc.description.abstract <p>Balassa and Samuelson argued that production technologies differ among countries, and the price of the nontraded good is higher in countries with higher labor productivity. This paper shows that the Balassa-Samuelson effect exists even when countries share identical production technologies. In the celebrated Heckscher-Ohlin model, changes in factor endowments do not affect the equalized factor prices. This paper considers a three-factor, three-industry model, and demonstrates that endowment differences between countries can cause disparities in their wage rates and the prices of the nontraded good. A dynamic panel data analysis shows that a 10% increase in per capita real GDP results in a 2% increase in the housing price for non-EU OECD countries.</p>
dc.description.comments <p>This is a manuscript of an article published as Choi, Yoonho, Hailong Jin, and E. Kwan Choi. "Why are nontraded goods cheaper in poor countries?." <em>International Review of Economics & Finance</em> (2018). doi: <a href="https://doi.org/10.1016/j.iref.2018.03.022" target="_blank" title="Persistent link using digital object identifier">10.1016/j.iref.2018.03.022</a>. Posted with permission.</p>
dc.format.mimetype application/pdf
dc.identifier archive/lib.dr.iastate.edu/econ_las_pubs/653/
dc.identifier.articleid 1651
dc.identifier.contextkey 13154153
dc.identifier.s3bucket isulib-bepress-aws-west
dc.identifier.submissionpath econ_las_pubs/653
dc.identifier.uri https://dr.lib.iastate.edu/handle/20.500.12876/21892
dc.language.iso en
dc.source.bitstream archive/lib.dr.iastate.edu/econ_las_pubs/653/Choi_WhyNontradedManuscript.pdf|||Sat Jan 15 01:24:18 UTC 2022
dc.source.uri 10.1016/j.iref.2018.03.022
dc.subject.disciplines Econometrics
dc.subject.disciplines Economic Theory
dc.subject.disciplines International Economics
dc.subject.keywords Balassa-Samuelson effect
dc.subject.keywords Nontraded good
dc.subject.keywords Factor price equalization
dc.title Why are nontraded goods cheaper in poor countries?
dc.type article
dc.type.genre article
dspace.entity.type Publication
relation.isAuthorOfPublication eb1751c8-ec9a-4ab9-b9d3-115b9b5673de
relation.isOrgUnitOfPublication 4c5aa914-a84a-4951-ab5f-3f60f4b65b3d
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