Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/271878 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10234
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper develops an empirical model of consumer taste in twenty-nine Belgium food industries for the period from 1998-2005 to generate a "taste distance" measure of over 1,800 firm-product exports to 53 country destinations. We estimate consumer taste using a control function approach and perform a decomposition of export revenues of firm-products to establish the importance of representative consumer taste relative to quality and marginal cost in export success. We find substantial taste heterogeneity in food exports across destination countries. Overall, in the large majority of food exports, consumer taste is an important and separate demand determinant to explain export revenues. Depending on the product, taste for a product explains between 4-30% of export revenues. Thus, any taste shock due to events such as pandemics or climate change, may induce substantial changes in export profitability of firms.
Subjects: 
consumer taste
quality
productivity
exports
firm-product
food
JEL: 
F12
F14
Document Type: 
Working Paper
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