Estimating US Consumer Gains from Chinese Imports

TY - JOUR

T1 - Estimating US Consumer Gains from Chinese Imports

AU - Bai, Liang

AU - Stumpner, Sebastian

PY - 2019

Y1 - 2019

N2 - We estimate the size of US consumer gains from Chinese imports during 2004–2015. Using barcode-level price and expenditure data, we construct inflation rates under CES preferences, and use Chinese exports to Europe as an instrument. We find significant negative effects of Chinese imports on US prices. This effect is driven by both changes in the prices of existing goods and the entry of new goods, and it is similar across consumer groups by income or region. A simple benchmarking exercise suggests that Chinese imports led to a 0.19 percentage point annual reduction in the price index for consumer tradables.

AB - We estimate the size of US consumer gains from Chinese imports during 2004–2015. Using barcode-level price and expenditure data, we construct inflation rates under CES preferences, and use Chinese exports to Europe as an instrument. We find significant negative effects of Chinese imports on US prices. This effect is driven by both changes in the prices of existing goods and the entry of new goods, and it is similar across consumer groups by income or region. A simple benchmarking exercise suggests that Chinese imports led to a 0.19 percentage point annual reduction in the price index for consumer tradables.

U2 - 10.1257/aeri.20180358

DO - 10.1257/aeri.20180358

M3 - Article

SN - 2640-2068

VL - 1

JO - American Economic Review: Insights

JF - American Economic Review: Insights

IS - 2

ER -