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Consumers’ Welfare and Trade Liberalization: Evidence from the Car Industry in Colombia

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  • Tovar, Jorge

Abstract

This paper examines the effects of tariff removal on consumers’ welfare focusing on the Colombian trade liberalization process and its automobile industry. Using product level data this paper calculates the post-reform gains in consumers’ welfare to be just below three thousand dollars per purchaser. Counterfactual simulations suggest that the gains achieved are due, for the most part, to increased variety rather than to price competition.

Suggested Citation

  • Tovar, Jorge, 2012. "Consumers’ Welfare and Trade Liberalization: Evidence from the Car Industry in Colombia," World Development, Elsevier, vol. 40(4), pages 808-820.
  • Handle: RePEc:eee:wdevel:v:40:y:2012:i:4:p:808-820
    DOI: 10.1016/j.worlddev.2011.09.021
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    Cited by:

    1. Juan Esteban Carranza & Alejandra Ximena González, 2014. "Estimación de la demanda de vehículos nuevos de los hogares colombianos entre 2001 y 2011," Borradores de Economia 824, Banco de la Republica de Colombia.
    2. Jamil Nasir, 2020. "The Tariff Tripod of Pakistan: Protection, Export Promotion, and Revenue Generation," PIDE-Working Papers 2020:6, Pakistan Institute of Development Economics.
    3. Douglas A. Irwin, 2019. "Does Trade Reform Promote Economic Growth? A Review of Recent Evidence," Working Paper Series WP19-9, Peterson Institute for International Economics.
    4. Ana Cecília Fieler & Marcela Eslava & Daniel Xu, 2014. "Trade, Skills, and Quality Upgrading: A Theory with Evidence from Colombia," NBER Working Papers 19992, National Bureau of Economic Research, Inc.
    5. Minsoo Park & Hongjai Rhee, 2014. "Effects of FTA Provisions on the Market Structure of the Korean Automobile Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 45(1), pages 39-58, August.
    6. Jan De Loecker & Johannes Van Biesebroeck, 2016. "Effect of International Competition on Firm Productivity and Market Power," NBER Working Papers 21994, National Bureau of Economic Research, Inc.
    7. Hasan Tuluy, 2016. "Regional economic integration in Africa," Papers Presented at Global Meetings of the Emerging Markets Forum 2016africaintegration, Emerging Markets Forum.

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