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Investigating the impact of SPS standards on trade using a VES model

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  • Lan Liu
  • Chengyan Yue

Abstract

This study employs a novel nested variable elasticity of substitution (VES) utility model to investigate the impacts of food safety standards on international trade and social welfare. The nested VES utility model is applied to investigate the impact of the European Union (EU) Hazard Analysis Critical Control Point (HACCP) standard on EU orange juice (OJ) trade and social welfare. Our results show that the standard's impact on trade and welfare is underestimated when the elasticity of substitution is restricted to be constant. Our findings indicate that the implementation of the EU HACCP standard increases EU OJ imports as well as consumer welfare. We also find that the EU HACCP standard has a greater impact on intra-EU OJ imports than on extra-EU OJ imports. , Oxford University Press.

Suggested Citation

  • Lan Liu & Chengyan Yue, 2012. "Investigating the impact of SPS standards on trade using a VES model," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 39(3), pages 511-528, July.
    • Handle: RePEc:oup:erevae:v:39:y:2012:i:3:p:511-528
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    File URL: http://hdl.handle.net/10.1093/erae/jbr036
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    Citations

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    Cited by:

    1. Daniele Curzi & Lucia Pacca & Alessandro Olper, 2013. "Estimating Food Quality from Trade Data: An Empirical Assessment," LICOS Discussion Papers 33913, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    2. Adrián Rabadán & Ángela Triguero, 2021. "Influence of food safety standards on trade: Evidence from the pistachio sector," Agribusiness, John Wiley & Sons, Ltd., vol. 37(3), pages 489-514, July.
    3. Dou, Lei & Yanagishima, Koji & Li, Xin & Li, Ping & Nakagawa, Mitsuhiro, 2015. "Food safety regulation and its implication on Chinese vegetable exports," Food Policy, Elsevier, vol. 57(C), pages 128-134.
    4. Jacob Wood & Jie Wu & Yilin Li & Haejin Jang, 2017. "The Economic Impact of SPS Measures on Agricultural Exports to China: An Empirical Analysis Using the PPML Method," Social Sciences, MDPI, vol. 6(2), pages 1-18, May.
    5. Curzi, Daniele & Pacca, Lucia, 2015. "Price, quality and trade costs in the food sector," Food Policy, Elsevier, vol. 55(C), pages 147-158.
    6. Ronen, Eyal, 2017. "The Trade-Enhancing Effect Of Non-Tariff Measures On Virgin Olive Oil," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 5(3), July.
    7. Jacob Wood & Jie Wu & Yilin Li & Jungsuk Kim, 2017. "TBT and SPS impacts on Korean exports to China: empirical analysis using the PPML method," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 31(2), pages 96-114, November.
    8. Melo, Oscar & Engler, Alejandra & Nahuehual, Laura & Cofre, Gabriela & Barrena, José, 2014. "Do Sanitary, Phytosanitary, and Quality-related Standards Affect International Trade? Evidence from Chilean Fruit Exports," World Development, Elsevier, vol. 54(C), pages 350-359.
    9. Minor, Travis & Parrett, Matt, 2017. "The economic impact of the Food and Drug Administration’s Final Juice HACCP Rule," Food Policy, Elsevier, vol. 68(C), pages 206-213.
    10. Chen, Rui & Hartarska, Valentina & Wilson, Norbert L.W., 2018. "The causal impact of HACCP on seafood imports in the U.S.: An application of difference-in-differences within the gravity model," Food Policy, Elsevier, vol. 79(C), pages 166-178.
    11. Zheng, Yuqing & Muth, Mary & Brophy, Jenna, 2013. "The Impact of Food Safety Third-Party Certifications on China’s Food Exports to the United States," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149926, Agricultural and Applied Economics Association.

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