Factors That Account for the Large Variations in U.S. Export Prices

Using product level U.S. export data from 1989 to 2001, there is evidence that U.S. exporters price discriminate across markets. Variation in the quality of the products is one reason for the observed price differentiation. U.S. exporters also price discriminate based on transaction costs. Finally, U.S. exporters practice pricing-to-market and this pricing strategy is another source of the variations in U.S. export prices. Some of these conclusions though are weakened when export prices toward the center of the price distribution are considered. JEL no. F14