Theory and observation set out the conditions such that market prices of outputs and productive inputs select an allocation of factor inputs by comparative advantage, so that (relatively) low-cost inputs go to producing low-cost outputs. In the process, aggregate output may increase as a by-product or by design .  Such specialization of production creates opportunities for gains from trade whereby resource owners benefit from trade in the sale of one type of output for other, more highly valued goods. A measure of gains from trade is the increased income levels that trade may facilitate. 
He earned his bachelor’s and master’s degrees in agricultural engineering from the Universities of Göttingen and Bonn respectively. He received a second master and a PhD in agricultural and resource economics from the University of California, Berkeley, where he was a recipient of a National Science Foundation (NSF) grant, as well as a grant from the Institute on Global Conflict and Cooperation (IGCC). He was a visiting professor at Resources for the Future, as well as at LMU Munich, University of Cologne and at IZA, Bonn.