Presented by Robert Inklaar (University of Groningen)
In this talk we use the Melitz (2003) model to compare the cost of living and welfare across countries, while incorporating product variety measured by the count of barcodes or firms. For 47 countries, we compare welfare relative to the United States to conventional measures of real consumption. Relative welfare is lower than that indicated by real consumption for most countries, except for a select group of nations in Europe and some large countries like China and Russia. This qualitative pattern has some similarities to that found in Jones and Klenow (2016), but for very different reasons.
Robert Inklaar is Professor in the Economics of Productivity and Welfare at the University of Groningen and Director of the Groningen Growth and Development Centre. His research focuses on the measurement and understanding of differences in income and productivity across countries and over time. He is one of the developers of the Penn World Table, a widely used database that brings a global perspective to this subject matter. Example of his recent research is work on productivity growth trends in Europe, accounting for income differences throughout the twentieth century and how to incorporate natural resources in productivity comparisons.