Affinity and International Trade

Working Paper
05-3
June 2005

Marcus NolandAmerican public attitudes toward foreign countries help explain differences in trade volumes between the US and other countries beyond what can be explained through standard economic models. A one standard deviation increase in warmth of feeling is associated with a 20 to 31 percent larger trade volume. These public attitudes are in turn correlated with indices of cultural affinity and political ideology. A one standard deviation increase in the democracy score is associated with a 5 to 7 percent increase in trade.