Trade, non-homothetic preferences, and the impact of country size on wages

- We examine the impact of country size on wages under non-homothetic preferences.
- We consider two cases with one representative consumer and many identical consumers.
- The results are different from the case with CES preferences.
- The advantage of larger country size is not always guaranteed.
- The two cases lead to very different results.

We show that the larger country does not always get the higher wage in a trade model with non-homothetic preferences. The cases of one representative consumer and many identical consumers yield different results.