On Estimating the Static Effects of Preferential Tariffs
AbstractIt is shown that the estimates of trade creation, trade diversion, and the erosion of GSP benefits derived from the well-known methodology of Robert Baldwin and Tracy Murray (1977) are biased for two reasons. First, the estimates neglect an intercommodity substitution and secondly, the estimates are based on free on board values of imports rather than the values actually paid by consumers in the donor country. Acknowledging these biases results in the overestimation of the aforementioned aggregate effects by 9 percent, 57 percent, and 54 percent respectively. The implicit own- and cross-price elasticities of demand of the corrected methodology are also reported.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Eastern Economic Association in its journal Eastern Economic Journal.
Volume (Year): 13 (1987)
Issue (Month): 4 (Oct-Dec)
Contact details of provider:
Postal: c/o Dr. Alexandre Olbrecht, The Anisfield School of Business 205, Ramapo College, 505 Ramapo Valley Road, Ramapo, New Jersey 07430, USA
Phone: (201) 684-7346
Web page: http://www.ramapo.edu/eea/journal.html
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Baldwin, R E & Murray, Tracy, 1977. "MFN Tariff Reductions and Developing Country Trade Benefits under the GSP," Economic Journal, Royal Economic Society, vol. 87(345), pages 30-46, March.
- Pomfret, Richard, 1986. "MFN Tariff Reductions and Developing Country Trade Benefits under the GSP: A Comment," Economic Journal, Royal Economic Society, vol. 96(382), pages 534-36, June.
- Rousslang, Donald & Parker, Stephen, 1984. "Cross-Price Elasticities of U.S. Import Demand," The Review of Economics and Statistics, MIT Press, vol. 66(3), pages 518-23, August.
- Clague, Christopher, 1971. "Tariff Preferences and Separable Utility," American Economic Review, American Economic Association, vol. 61(2), pages 188-94, May.
- Kara Reynolds, 2005. "The Erosion of Tariff Preferences: The Impact of U.S. Tariff Reductions on Developing Countries," International Trade 0507001, EconWPA.
- Dale Truett & Lila Truett, 1993. "Trade preferences and exports of manufactures: A case study of Bolivia and Brazil," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 129(3), pages 573-590, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson, College of the Holy Cross).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.