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A Tale of Pork Prices: Evasion and Attenuation of a Japanese Tariff

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  • Kazuki Onji
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    Abstract

    This paper empirically examines the effectiveness of a safeguard tariff in the Japanese market for imported pork parts. The goals are, first, to consider a refinement to the traditional market-based method for evasion detection, and, second, to apply the method in a setting where evasion is suspected to be widespread. Utilising a within-pig variation in tariff burdens and the timing of safeguard invocations, I examine a panel of monthly wholesale prices on narrowly-defined pork productions from 2001 through 2008. The results are consistent with a hypothesis that a widespread evasion nullified the safeguard tariff on pork, and are robust to a range of alternative explanations including the adjustment of profit margins by traders. Safeguard tariffs appear to be a simple mechanism, but behavioural responses can undo the policy intent.

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    File URL: https://crawford.anu.edu.au/pdf/pep/apep-382.pdf
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    Bibliographic Info

    Paper provided by Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University in its series Asia Pacific Economic Papers with number 382.

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    Length: 31 pages
    Date of creation: 2009
    Date of revision:
    Handle: RePEc:csg:ajrcau:382

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    Web page: https://crawford.anu.edu.au/research_units/ajrc/
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    1. James Alm & Edward Sennoga & Mark Skidmore, 2009. "Perfect Competition, Urbanization, And Tax Incidence In The Retail Gasoline Market," Economic Inquiry, Western Economic Association International, vol. 47(1), pages 118-134, 01.
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    7. Pitt, Mark M., 1981. "Smuggling and price disparity," Journal of International Economics, Elsevier, vol. 11(4), pages 447-458, November.
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    12. Pinelopi Koujianou Goldberg & Rebecca Hellerstein, 2008. "A Structural Approach to Explaining Incomplete Exchange-Rate Pass-Through and Pricing-to-Market," American Economic Review, American Economic Association, vol. 98(2), pages 423-29, May.
    13. Mary E. Lovely, 1994. "Crossing the Border: Does Commodity Tax Evasion Reduce Welfare and Can Enforcement Improve It?," Canadian Journal of Economics, Canadian Economics Association, vol. 27(1), pages 157-74, February.
    14. Bhagwati, Jagdish N & Hansen, Bent, 1973. "A Theoretical Analysis of Smuggling," The Quarterly Journal of Economics, MIT Press, vol. 87(2), pages 172-87, May.
    15. Timothy J. Besley & Harvey S. Rosen, 1998. "Sales Taxes and Prices: An Empirical Analysis," NBER Working Papers 6667, National Bureau of Economic Research, Inc.
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