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Trade restrictiveness and efficiency

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  • Nancy H. Chau
  • Rolf F”re
  • Shawna Grosskopf

Abstract

This article proposes a trade restrictiveness quantity index (TRQI) to measure the welfare impact of trade restrictions based on a distance functions approach. The TRQI embodies two Farrell measures of efficiency-respectively for producers and consumers-that can be computed using standard efficiency measurement techniques. The TRQI can also be decomposed into a trade distortion and domestic distortion component. In the context of the debate on the interlinkages between openness and economic performance, the TRQI offers a means to disentangle economic inefficiencies induced by trade restrictions alone, from otherwise not directly trade-related economic inefficiencies induced by domestic distortions. Copyright 2003 By The Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

Suggested Citation

  • Nancy H. Chau & Rolf F”re & Shawna Grosskopf, 2003. "Trade restrictiveness and efficiency," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(3), pages 1079-1095, August.
  • Handle: RePEc:ier:iecrev:v:44:y:2003:i:3:p:1079-1095
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    Cited by:

    1. Chau, Nancy H. & Färe, Rolf, 2011. "Shadow pricing market access: A trade benefit function approach," Journal of Economic Theory, Elsevier, vol. 146(4), pages 1631-1663, July.
    2. Raimondos-Moller, Pascalis & Woodland, Alan D., 2006. "Measuring tax efficiency: A tax optimality index," Journal of Public Economics, Elsevier, pages 1903-1922.
    3. Nancy H. Chau & Rolf Färe & Shawna Grosskopf, 2013. "Trade Restrictiveness and Pollution," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 15(1), pages 25-52, February.
    4. Raimondos-Møller, Pascalis & Woodland, Alan D., 2006. "Measuring Tax Efficiency," Working Papers 05-2004, Copenhagen Business School, Department of Economics.
    5. Maria Cipollina & Luca Salvatici, 2008. "Measuring Protection: Mission Impossible?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(3), pages 577-616, July.
    6. Jeffrey Reimer & Sang Kang, 2010. "Estimation of trade and domestic distortions: an application to world agriculture," Journal of Productivity Analysis, Springer, vol. 34(3), pages 257-265, December.
    7. Valentin Zelenyuk, 2011. "A Scale Elasticity Measure for Directional Distance Function and its Dual," CEPA Working Papers Series WP062011, School of Economics, University of Queensland, Australia.

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