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Reconciling Bilateral Trade Data For Use In Gtap

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  • Gehlhar, Mark J.

Abstract

Bilateral trade flows are reported by both importers and exporters. Large discrepancies in reported import/export trade flows can be found when these two reports are compared. The GTAP database requires consistency between the export flow and its corresponding import flow for all partner pairs. Therefore, bilateral trade data in its reported form cannot be directly used for GTAP. Various methods can be used to produce a consistent set of bilateral trade flows. However, achieving consistency alone does not necessarily provide credible trade flows. Matrix balancing using trade totals published by international agencies is not appropriate since these totals are not reconciled but are simply totals from country-reported flows. A method is developed with the aim of extracting the most reliable reported trade flows from reported import and export flows. Specific examples are used to illustrate how discrepancies can result from reporting errors and transport margins. Evidence is shown indicating that discrepancies often arise from erroneous reporting by one of the partners. Systematic reporting errors associated with a reporter can be measured by the share of consistent transactions with partners. The most reliable reported flows are selected based on credibility of reporters. The source of international bilateral trade for GTAP is United Nations COMTRADE database. It contains the complete set of countries in the world and the set of commodities covering total merchandise trade. Since errors in reporting are country-commodity specific, data is processed at the individual country and SITC 4-digit level before aggregating to the 30-region 31- merchandise trade commodity database in version 3 of the GTAP data base.

Suggested Citation

  • Gehlhar, Mark J., 1996. "Reconciling Bilateral Trade Data For Use In Gtap," Technical Papers 28714, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
  • Handle: RePEc:ags:pugttp:28714
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    Cited by:

    1. Han, Yijun & Hertel, Thomas W., 2003. "The Puzzling State of China's Meat Trade," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 18(2), pages 1-6.
    2. Bas Straathof & Gert Jan Linders & Arjan Lejour & Jan Möhlmann, 2008. "The internal market and the Dutch economy: implications for trade and economic growth," CPB Document 168, CPB Netherlands Bureau for Economic Policy Analysis.
    3. repec:spr:endesu:v:19:y:2017:i:5:d:10.1007_s10668-016-9839-y is not listed on IDEAS
    4. Ferrantino, Michael J. & Liu, Xuepeng & Wang, Zhi, 2012. "Evasion behaviors of exporters and importers: Evidence from the U.S.–China trade data discrepancy," Journal of International Economics, Elsevier, vol. 86(1), pages 141-157.
    5. Christen, Elisabeth & Francois, Joseph & Hoekman, Bernard, 2013. "Computable General Equilibrium Modeling of Market Access in Services," Handbook of Computable General Equilibrium Modeling, Elsevier.
    6. Joseph Francois & Miriam Manchin & Patrick Tomberger, 2015. "Services Linkages and the Value Added Content of Trade," The World Economy, Wiley Blackwell, vol. 38(11), pages 1631-1649, November.
    7. Kastner, Thomas & Kastner, Michael & Nonhebel, Sanderine, 2011. "Tracing distant environmental impacts of agricultural products from a consumer perspective," Ecological Economics, Elsevier, vol. 70(6), pages 1032-1040, April.
    8. Christophe Gouel & Houssein Guimbard & David Laborde, 2012. "A Foreign Direct Investment database for global CGE models," Working Papers 2012-08, CEPII research center.
    9. Osman, Rehab Osman Mohamed, 2012. "The EU Economic Partnership Agreements with Southern Africa: a computable general equilibrium analysis," Economics PhD Theses 0412, Department of Economics, University of Sussex Business School.
    10. Christen, Elisabeth & Francois, Joseph & Hoekman, Bernard, 2012. "CGE modeling of market access in services," Policy Research Working Paper Series 6106, The World Bank.
    11. Peter B. Dixon & Maureen Rimmer & Nhi Tran, 2019. "Creating a Disaggregated CGE Model for Trade Policy Analysis: GTAP-MVH," Centre of Policy Studies/IMPACT Centre Working Papers g-291, Victoria University, Centre of Policy Studies/IMPACT Centre.
    12. Peter B. Dixon & Maureen Rimmer & Nhi Tran, 2019. "GTAP-MVH, A Model for Analysing the Worldwide Effects of Trade Policies in the Motor Vehicle Sector: Theory and Data," Centre of Policy Studies/IMPACT Centre Working Papers g-290, Victoria University, Centre of Policy Studies/IMPACT Centre.
    13. Wang, Zhi & Gehlhar, Mark & Yao, Shunli, 2010. "A globally consistent framework for reliability-based trade statistics reconciliation in the presence of an entrepôt," China Economic Review, Elsevier, vol. 21(1), pages 161-189, March.
    14. Shaar, Karam, 2019. "Essays on modern economic issues in international trade, exchange rates and housing," Working Paper Series 8039, Victoria University of Wellington, School of Economics and Finance.
    15. Charles D. Brummitt & Andres Gomez-Lievano & Ricardo Hausmann & Matthew H. Bonds, 2018. "Machine-learned patterns suggest that diversification drives economic development," Papers 1812.03534, arXiv.org.
    16. Daniel Dujava & Maria Siranova, 2017. "Getting the Measures of Trade Misinvoicing Right: Bilateral Panel Data Approach," Working Papers wp98, Institute of Economic Research, SAS, revised 20 Dec 2017.
    17. Ferrantino, Michael J. & Wang, Zhi, 2008. "Accounting for discrepancies in bilateral trade: The case of China, Hong Kong, and the United States," China Economic Review, Elsevier, vol. 19(3), pages 502-520, September.
    18. Julien Gooris & Cristina Mitaritonna, 2015. "Which import restrictions matter for trade in services ?," Working Papers 2015-33, CEPII research center.
    19. Cate Arie ten, 2014. "The Identification of Reporting Accuracies from Mirror Data," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 234(1), pages 70-84, February.
    20. Arie ten Cate, 2007. "Modelling the reporting discrepancies in bilateral data," CPB Memorandum 179, CPB Netherlands Bureau for Economic Policy Analysis.
    21. Meriem Hamdi-Cherif & Frédéric Ghersi, 2012. "Correcting the 'self-trade' issue in the GTAPAgg software - Technical paper," CIRED Working Papers hal-00866558, HAL.
    22. Meriem Hamdi-Cherif & Frédéric Ghersi, 2012. "Correcting the 'self-trade' issue in the GTAPAgg software - Technical paper," Working Papers hal-00866558, HAL.
    23. Arjan Lejour & Nico van Leeuwen & Arie ten Cate, 2008. "The quality of bilateral services trade data: contribution to GTAP7 database," CPB Memorandum 212, CPB Netherlands Bureau for Economic Policy Analysis.
    24. Tiziano Distefano & Guido Chiarotti & Francesco Laio & Luca Ridolfi, 2018. "Spatial distribution of the international food prices: unexpected randomness and heterogeneity," SEEDS Working Papers 0118, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Jan 2018.
    25. Shaar, Karam, 2017. "Reconciling International Trade Data," MPRA Paper 81572, University Library of Munich, Germany.

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    Keywords

    International Relations/Trade;

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