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Trade restrictiveness and efficiency

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  • Nancy H. Chau
  • Rolf F”re
  • Shawna Grosskopf

Abstract

This article proposes a trade restrictiveness quantity index (TRQI) to measure the welfare impact of trade restrictions based on a distance functions approach. The TRQI embodies two Farrell measures of efficiency-respectively for producers and consumers-that can be computed using standard efficiency measurement techniques. The TRQI can also be decomposed into a trade distortion and domestic distortion component. In the context of the debate on the interlinkages between openness and economic performance, the TRQI offers a means to disentangle economic inefficiencies induced by trade restrictions alone, from otherwise not directly trade-related economic inefficiencies induced by domestic distortions. Copyright 2003 By The Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

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Bibliographic Info

Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 44 (2003)
Issue (Month): 3 (08)
Pages: 1079-1095

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Handle: RePEc:ier:iecrev:v:44:y:2003:i:3:p:1079-1095

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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.
  2. Nancy H. Chau & Rolf Färe & Shawna Grosskopf, 2013. "Trade Restrictiveness and Pollution," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 15(1), pages 25-52, 02.
  3. Pascalis Raimondos-Møller & Alan D. Woodland, 2004. "Measuring Tax Efficiency: A Tax Optimality Index," CESifo Working Paper Series 1236, CESifo Group Munich.
  4. Maria Cipollina & Luca Salvatici, 2008. "Measuring Protection: Mission Impossible?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(3), pages 577-616, 07.
  5. Chau, Nancy H. & Fare, Rolf, 2008. "Shadow Pricing Market Access: A Trade Benefit Function Approach," Discussion Papers 6218, University of Bonn, Center for Development Research (ZEF).
  6. Raimondos-Møller, Pascalis & Woodland, Alan D., 2006. "Measuring Tax Efficiency," Working Papers 05-2004, Copenhagen Business School, Department of Economics.
  7. Jeffrey Reimer & Sang Kang, 2010. "Estimation of trade and domestic distortions: an application to world agriculture," Journal of Productivity Analysis, Springer, vol. 34(3), pages 257-265, December.

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