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Welfare Analysis of a Prohibitive NTM in a Society with a Proportion of Concerned Consumers

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  • M. Mahdi Ghodsi

    ()
    (Faculty of Economic Sciences, University of Warsaw; Department of Economic Sciences of Catholic University of Milan)

Abstract

The aim of this contribution is to provide a cost-benefit analysis in a partial equilibrium framework to investigate the welfare consequences of a non-tariff measure (NTM). The important issue of the analysis is having two groups of indifferent and concerned consumers. The ultimate aim of the paper is to investigate whether or not the paternalistic behavior of government is in line with the willingness of the consumers for demand. The existence of information about the origin of goods is the leading issue of the analysis that provides two different scenarios. The model is calibrated with data on consumption of shrimps. The findings suggest that in the existence of such information, NTM policy has the lowest international losses and highest domestic gains. The policy implication of these results suggests that governments should try to increase the information in the market when they are following good faith for imposition of NTM.

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File URL: http://www.wne.uw.edu.pl/inf/wyd/WP/WNE_WP97.pdf
File Function: First version, 2013
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Bibliographic Info

Paper provided by Faculty of Economic Sciences, University of Warsaw in its series Working Papers with number 2013-12.

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Length: 29 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:war:wpaper:2013-12

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Related research

Keywords: welfare; trade policy; non-tariff measures; technical barriers to trade;

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References

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  1. Mohammad Mahdi Ghodsi, 2013. "Corruption and the Level of Trade Protectionism," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 30.
  2. Emma Aisbett & Lee M. Pearson, 2012. "Environmental and Health Protections, or New Protectionism? Determinants of SPS Notifications by WTO Members," Crawford School Research Papers 1213, Crawford School of Public Policy, The Australian National University.
  3. Frank van Tongeren & John Beghin & Stéphane Marette, 2009. "A Cost-Benefit Framework for the Assessment of Non-Tariff Measures in Agro-Food Trade," OECD Food, Agriculture and Fisheries Papers 21, OECD Publishing.
  4. Maskus, Keith E. & Wilson, John S. & Tsunehiro Otsuki, 2000. "Quantifying the impact of technical barriers to trade : a framework for analysis," Policy Research Working Paper Series 2512, The World Bank.
  5. Beghin, John & Disdier, Anne-Célia & Marette, Stéphan & Van Tongeren, Frank, 2012. "Welfare costs and benefits of non-tariff measures in trade: a conceptual framework and application," World Trade Review, Cambridge University Press, vol. 11(03), pages 356-375, July.
  6. Philip L. Paarlberg & John G. Lee, 1998. "Import Restrictions in the Presence of a Health Risk: An Illustration Using FMD," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 175-183.
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