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Trade Costs and the Gains from Trade in Crop Agriculture

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  • Jeffrey J. Reimer
  • Man Li

Abstract

We develop a simulation model of world crop markets that is based upon Ricardian comparative advantage. We apply the model to twenty-three countries and provide measures of the degree of globalization in this sector, the gains from trade, and the elasticity of trade volumes to trade costs. The distribution of the gains from trade across countries is uneven due to important differences in openness to imports, productivity, and other factors, some of which appear to be related to a country's level of development. Distance limits the extent by which changes in one country are transmitted to others. Copyright 2010, Oxford University Press.

Suggested Citation

  • Jeffrey J. Reimer & Man Li, 2010. "Trade Costs and the Gains from Trade in Crop Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(4), pages 1024-1039.
    • Handle: RePEc:oup:ajagec:v:92:y:2010:i:4:p:1024-1039
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    File URL: http://hdl.handle.net/10.1093/ajae/aaq046
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    JEL classification:

    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • F18 - International Economics - - Trade - - - Trade and Environment

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