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Abstract The earnings of individuals depend on the demand for the factor services they supply. International trade may therefore affect earnings inequality because either (i) foreign consumers and firms demand domestic factor services in different proportions than domestic consumers and firms do, an export channel; or (ii) domestic consumers and firms change their demand for domestic factor services in response to the availability of foreign goods, an import channel. Building on this idea, we develop new measures of export and import exposure at the individual level and provide estimates of their incidence across the earnings distribution. The key input fed into our empirical analysis is a unique administrative data set from Ecuador that merges firm-to-firm transaction data, employer-employee matched data, owner-firm matched data, and firm-level customs transaction records. We find that export exposure is pro-middle class, import exposure is pro-rich, and in terms of overall incidence, the import channel is the dominant force. As a result, earnings inequality in Ecuador is higher than it would be in the absence of trade.
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Competitive Markets for Personal Data
Abstract: We study competitive data markets in which consumers own their personal data and can trade it with intermediaries, such as e-commerce platforms. Intermediaries use this data to provide services to the consumers, such as targeted offers from third-party merchants. Our main results identify a novel inefficiency, resulting in equilibrium data allocations that fail to maximize welfare. This inefficiency hinges on the role that intermediaries play as information gatekeepers, a hallmark of the digital economy. We provide three solutions to this market failure: establishing data unions, which manage consumers' data on their behalf; taxing the trade of data; and letting the price of data depend on its intended use.
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- Award ID(s):
- 2149315
- PAR ID:
- 10510223
- Publisher / Repository:
- ACM Economics and Computation
- Date Published:
- Journal Name:
- ACM EC
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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Accepted Manuscript1.0
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