Shipping the good apples out: A new perspective

An alternative explanation is provided for the Alchian and Allen substitution theorem, which posits that a per unit tax or shipping,fee applied to similar goods will increase the relative consumption of the higher-quality good The usual explanation is that consumers substitute out of "bad apples" and into "good apples." This article generalizes the Alchian and Allen result in an n-good world, providing an alternative explanation that is more cogent in situations where the two goods (for example $500 and $5 wines) are not close substitutes.