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Gainers and losers from trade reform in Morocco

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  • Ravallion, Martin
  • Lokshin, Michael

Abstract

The authors use Morocco's national survey of living standards to measure the short-term welfare impacts of prior estimates of the price changes attributed to various trade policy reforms for cereals-the country's main food staple. They find small impacts on mean consumption and inequality in the aggregate. There are both gainers and losers and (contrary to past claims) the rural poor are worse off on average after trade policy reforms. The authors decompose the aggregate impact on inequality into a"vertical"component (between people at different pre-reform welfare levels) and a"horizontal"component (between people at the same pre-reform welfare level). There is a large horizontal component which dominates the vertical impact of full de-protection. The diverse impacts reflect a degree of observable heterogeneity in consumption behavior and income sources, with implications for social protection policies.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3368.

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Date of creation: 01 Aug 2004
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Handle: RePEc:wbk:wbrwps:3368

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Related research

Keywords: Economic Theory&Research; Labor Policies; Poverty Monitoring&Analysis; Environmental Economics&Policies; Consumption; Inequality; Environmental Economics&Policies; Economic Theory&Research; Poverty Assessment; Poverty Lines;

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  1. Hertel, Thomas W. & Reimer, Jeffrey J., 2004. "Predicting the poverty impacts of trade reform," Policy Research Working Paper Series 3444, The World Bank.
  2. Alan J. Auerbach & Kevin A. Hassett, 2002. "A New Measure of Horizontal Equity," American Economic Review, American Economic Association, American Economic Association, vol. 92(4), pages 1116-1125, September.
  3. Frank Cowell, 1998. "Measurement of inequality," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 2084, London School of Economics and Political Science, LSE Library.
  4. Ravallion, Martin, 2001. "Growth, inequality, and poverty : looking beyond averages," Policy Research Working Paper Series 2558, The World Bank.
  5. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, Econometric Society, vol. 47(4), pages 901-20, July.
  6. Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, Econometric Society, vol. 55(4), pages 749-64, July.
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