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Estimating the Price Effects of Non-Tariff Barriers

  • Judith M Dean , José E Signoret , Robert M. Feinberg , Rodney D. Ludema and Michael J Ferrantino
Published/Copyright: March 23, 2009
The B.E. Journal of Economic Analysis & Policy
From the journal The B.E. Journal of Economic Analysis & Policy Volume 9 Issue 1

Abstract

As multilateral negotiations focus more on reductions and removal of non-tariff barriers (NTBs), the importance of quantifying the impact of these barriers has increased. Recent studies have derived ad valorem equivalents for NTBs for a large number of countries and/or products, but the derivation has been indirect, due to either lack of price data or NTB incidence measures. This paper uses city level retail price data to directly estimate the average impact of core NTBs on prices of 47 consumer products, grouped into four separate sectors, for more than 60 countries in 2001. The analysis uses both government self-reported data and a new database of private sector complaint data to assess NTB incidence. A differentiated products model is used to capture imperfect substitutability between products. With city level price data—including both inter- and intra-country price differences—a more precise distinction can be made between the impact of NTBs and the impact of local distribution costs in raising price. The model is estimated using an instrumental variables approach to incorporate the endogeneity of NTBs. Results suggest that core NTBs are still highly restrictive in many countries and for many traded goods. While NTBs appear to be complements to tariffs, in some sectors the presence of a tariff reduces the price impact of the NTB. Results also suggest that in some sectors, the restrictiveness of NTBs is highly correlated with country income.

Keywords: non-tariff measure; trade barriers; estimation; imperfect competition
Published Online: 2009-3-23

©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston

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https://doi.org/10.2202/1935-1682.1972
Keywords for this article
non-tariff measure; trade barriers; estimation; imperfect competition

Articles in the same Issue

  1. Advances Article
  2. Economic Influences on Moral Values
  3. When Does Teacher Licensure Make Sense?
  4. Effects of Socio-Economic and Input-Related Factors on Polluting Plants' Location Decisions
  5. Vintage Effects and the Diffusion of Time-Saving Technological Innovations
  6. Where Should we Submit our Manuscript? An Analysis of Journal Submission Strategies
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  9. All in the Family: Mental Health Spillover Effects between Working Spouses
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  18. The Default-Prone U.S. Toxic Asset Auction Plan
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