'Oh, Give Me a Home (Trade Share)': Differential Import Price Inflation and Gains from Trade Across U.S. Households
July 2025
Working Paper Number:
CES-25-47
Abstract
Consumers are differentially exposed to trade based on their expenditures, but there is little data on how such trade exposure differs across consumer groups and over time. In this paper, we construct 'home trade shares' that vary by age, race, marital status, education, and urban status, and use these to analyze differences in inflation and welfare gains from trade for U.S. demographic groups over the years 1996'2018. We show that over this time period, import prices (inclusive of the effects of taste change) held down overall inflation for all groups. For the typical group, more than a quarter of the gains from trade relative to autarky accrued in our time period. Welfare gains from trade over our time period are largest for rural households, and smallest for Black households. Adding taste change to the typical welfare gains from trade formula boosts the gains for every group relative to the standard formula.
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:
demand,
sale,
gain,
import,
export,
price,
good,
expenditure,
inflation,
consumption,
spending,
consumer,
welfare,
poorer,
purchase,
trade costs
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Federal Reserve System,
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Census Bureau Disclosure Review Board,
Longitudinal Firm Trade Transactions Database,
World Trade Organization,
Federal Statistical Research Data Center,
Consumer Expenditure Survey
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