The issue of measuring product varietyhas received relatively little attention due to its inherentdifficulty. In the language of index numbers, an expansionin the range of inputs or outputs is a 'new goods'problem: a good that is newly available will have anobserved price and quantity, but no corresponding price orquantity the year before. The availability of this new goodwill yield a welfare gain to consumers, as well as aproductivity gain to firms buying the new input. In thispaper we show how product variety can be measured in thecase of a CES aggregator function. This paper is organizedas: after reviewing the literature on the 'newgoods' problem in section two, then discuss how tomeasure export variety in section three. In sections fourand five discuss the empirical applications to exportvariety growth in Mexico and China. Regression resultsrelating trade liberalization to industry export variety arepresented in section six, and conclusions are given insection seven.
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