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Shadow pricing market access: A trade benefit function approach

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  • Chau, Nancy H.
  • Färe, Rolf

Abstract

Appropriate assessment of the social value of market access is at the core of a broad range of inquiries in trade research. We propose a new approach based on a trade benefit function to obtain the shadow value of net imports. Our approach is in keeping with well-established trade welfare measurement techniques, for the trade benefit function is dual to the standard trade expenditure function. This dual relation further allows for a direct retrieval of the shadow values of net imports from the trade benefit function. The operationality of our approach is demonstrated in a series of applications and simulations.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 146 (2011)
Issue (Month): 4 (July)
Pages: 1631-1663

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Handle: RePEc:eee:jetheo:v:146:y:2011:i:4:p:1631-1663

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Web page: http://www.elsevier.com/locate/inca/622869

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Keywords: Trade benefit function Shadow prices of net imports;

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Cited by:
  1. Valentin Zelenyuk, 2011. "A Scale Elasticity Measure for Directional Distance Function and its Dual," CEPA Working Papers Series WP062011, School of Economics, University of Queensland, Australia.

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