This is the first paper that investigates the welfare gains from trade integration in the CEE after the fall of the iron curtain, and the role of variety growth in determining the magnitude of those gains. We apply the methodology of Feenstra (1994), Broda and Weinstein (2006) and Soderbery (2013) to international trade data for Latvia for the period 1990-1994. The estimated variety gains are substantial, ranging from 0.874% to 2.890% of GDP per year.
