On the effects of income heterogeneity in monopolistically competitive markets
研究了非位似偏好下垄断竞争市场中收入异质性对市场与福利的影响，发现收入分布均值不变但更平等时企业提高加价、减少产出但增加品种，且对穷人和贸易有负面效应。
This paper studies the market and welfare effects of income heterogeneity in monopolistically competitive product markets in the context of nonhomothetic preferences. In a closed economy, where richer individuals' expenditures are less sensitive to price change compared to poorer ones', a mean-preserving contraction of income distribution entices firms to charge higher markups, reduce output, and fosters creation of new varieties. General equilibrium effects have a negative impact on poorer individuals and, in specific circumstances, on the whole population. In an open economy with free trade, lower income inequality in one country creates price divergence between trading countries. Lower inequality not only further decreases trade volumes and values but also creates a general equilibrium effect that may negatively affect poor individuals. Finally, general equilibrium effects are shown to be quantitatively nonnegligible. © 2023 Elsevier B.V. All rights reserved.