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Switzerland's system of free trade agreements: Assessing the impact on imported goods

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  • Philipp Imhof

Abstract

In this paper, I estimate the aggregated ex-post effect of Switzerland's free trade agreements on the prospects for imported goods and quantify the implied consumer benefits. Applying a differencein- difference approach to highly disaggregated import data, I find no effects on the quality and variety dimensions but a significant reduction of 8.41% in quality-adjusted prices. Using the share of imports in consumer expenditure, I calculate an average consumer price reduction of 1.43%. The price reduction implies a positive consumer gain. However, I perform a pre-trend test to validate the required parallel trend assumption and document a potential underestimation of the actual effect on consumer gains.

Suggested Citation

  • Philipp Imhof, 2021. "Switzerland's system of free trade agreements: Assessing the impact on imported goods," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 71(01), pages 35-72, December.
    • Handle: RePEc:usg:auswrt:2021:71:01:35-72
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    More about this item

    Keywords

    Switzerland; free trade agreements; imports;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F6 - International Economics - - Economic Impacts of Globalization

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