1 Simonovska (2015) proposes a model with non-homothetic preferences from a hierarchic choice of consumption (Jackson, 1984). In this model, where the marginal utility is bounded (consumers may have zero demand for some varieties, see also Saur e, 2012), the relative price of a variety is higher in relatively richer markets which contradicts Hummels and Lugovskyy's (2009) results.

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Here a working paper version of the article published in AppliedEconomics, 2019, 51(30), 3293-3309.