Counterfeit Goods and Income Inequality

Author/Editor:

Stefania Scandizzo

Publication Date:

January 1, 2001

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper examines the effect of counterfeit goods in a world where consumers are differentiated by level of income and innovation is quality enhancing. Counterfeit goods are defined as products with the same characteristics as “originals”, but of lower quality. The effect of imitation on firms’ profits and consumer welfare depends on the distribution of income within the country. In particular, the greater the level of income inequality the larger the increase in consumer welfare due to the imitation, and the smaller the effect on profits of the state-of-the-art firm.

Series:

Working Paper No. 2001/013

Subject:

Competition Financial markets Income distribution Income inequality Labor National accounts Personal income

English

Publication Date:

January 1, 2001

ISBN/ISSN:

9781451843002/1018-5941

Stock No:

WPIEA0132001

Pages:

23

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