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Is Protection for Sale in U.S. Food Industries?

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  • Lopez, Rigoberto A.
  • Hathie, Ibrahima

Abstract

This article tests the Grossman-Helpman Protection for Sale model using panel data from U.S. food processing industries with endogenous protection, imports, and political organization of industries. The results support the key predictions of the model: organized industries are granted higher protection that decreases with import penetration and the price elasticity of imports, but in unorganized industries protection increases with import penetration. In spite of substantial differences in data sets and empirical procedures, the estimated weight on aggregate welfare is strikingly similar those found by Goldberg and Maggi (1999) and Gawande and Bandopadhyay (2000), implying that protection is not for sale in these industries. Furthermore, the presence of import quotas raises the level of protection substantially.

Suggested Citation

  • Lopez, Rigoberto A. & Hathie, Ibrahima, 2002. "Is Protection for Sale in U.S. Food Industries?," Research Reports 25182, University of Connecticut, Food Marketing Policy Center.
    • Handle: RePEc:ags:uconnr:25182
    DOI: 10.22004/ag.econ.25182
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    1. Richard E. Caves, 1976. "Economic Models of Political Choice: Canada's Tariff Structure," Canadian Journal of Economics, Canadian Economics Association, vol. 9(2), pages 278-300, May.
    2. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
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    6. Rigoberto A. Lopez, 2001. "Campaign Contributions and Agricultural Subsidies," Economics and Politics, Wiley Blackwell, vol. 13(3), pages 257-279, November.
    7. Rigoberto A. Lopez & Ibrahima Hathie, 2002. "Is Protection for Sale in U.S. Food Industries?," Food Marketing Policy Center Research Reports 069, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
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    1. Rigoberto A. Lopez & Ibrahima Hathie, 2002. "Is Protection for Sale in U.S. Food Industries?," Food Marketing Policy Center Research Reports 069, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.

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