The Impact of Heterogenity in Consumer Preferences in the Home Market Effect

The purpose of the final qualifying work is to study the impact of heterogeneity in consumer preferences in the home market effect, and also to develop a model. Objectives of the work can be formulated as: 1. Consider the historical aspect of the home market effect 2. Make a literary review of existing studies on this topic. 3. To study the effect of heterogeneous consumer preferences on the effect of the “home” market 4. Develop a model of the “home” market effect that takes into account the heterogeneity of consumer preferences 5. To assess the impact of the effect on the import of tobacco on the market of the Russian Federation The relevance of this work based at the fact that in earlier works devoted to the analysis of the effects of trade interaction, the assumption that consumer preferences are identical is most often used. This applies both to consumers within a single country and to consumers in different countries. However, this assumption is distorting the real economic picture. In connection with this circumstance, it is necessary to study the relationship of heterogeneity in consumer preferences in the context of the home market effect. The first chapter is devoted to the theoretical aspect of international trade. This chapter contains information from the scientific literature on the home market effect. The second chapter describes the development of a home market effect model that takes into account the influence of heterogeneity in consumer preferences. The third chapter contains the necessary data for the study of imports of the Russian Federation, as well as an analysis of statistical indicators. The result suggests that the home market effect on the tobacco market in the Russian Federation is absent, and location of the manufactures tobacco products has little effect on consumer preferences.