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A tale of pork prices : evasion and attenuation of a Japanese tariff

Author

Listed:
  • Kazuki Onji

    (Australia-Japan Research Centre)

Abstract

This paper empirically examines the effectiveness of a safeguard tariff in the Japanese market for imported pork parts. The goals are, first, to consider a refinement to the traditional market-based method for evasion detection, and, second, to apply the method in a setting where evasion is suspected to be widespread. Utilising a within-pig variation in tariff burdens and the timing of safeguard invocations, I examine a panel of monthly wholesale prices on narrowly-defined pork products from 2001 through 2008. The results are consistent with a hypothesis that a widespread evasion nullified the safeguard tariff on pork, and are robust to a range of alternative explanations including the adjustment of profit margins by traders. Safeguard tariffs appear to be a simple mechanism, but behavioural responses can undo the policy intent.

Suggested Citation

  • Kazuki Onji, 2009. "A tale of pork prices : evasion and attenuation of a Japanese tariff," Trade Working Papers 22883, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:tradew:22883
    as

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    File URL: http://www.eaber.org/node/22883
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    References listed on IDEAS

    as
    1. von Cramon-Taubadel, Stephan, 1998. "Estimating Asymmetric Price Transmission with the Error Correction Representation: An application to the German Pork Market," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, pages 1-18.
    2. Besley, Timothy J. & Rosen, Harvey S., 1999. "Sales Taxes and Prices: An Empirical Analysis," National Tax Journal, National Tax Association, pages 157-178.
    3. Pinelopi Koujianou Goldberg & Rebecca Hellerstein, 2008. "A Structural Approach to Explaining Incomplete Exchange-Rate Pass-Through and Pricing-to-Market," American Economic Review, American Economic Association, pages 423-429.
    4. Benjamin H. Liebman, 2006. "Safeguards, China, and the Price of Steel," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), pages 354-373.
    5. James Alm & Edward Sennoga & Mark Skidmore, 2009. "Perfect Competition, Urbanization, And Tax Incidence In The Retail Gasoline Market," Economic Inquiry, Western Economic Association International, vol. 47(1), pages 118-134, January.
    6. Dean Yang, 2004. "Can Enforcement Backfire? Crime Displacement in the Context of Customs Reform in the Philippines," Working Papers 520, Research Seminar in International Economics, University of Michigan.
    7. Rezitis, Anthony N. & Brown, A. Blake, 1999. "Pass-through of exchange rates and tariffs in Greek-US tobacco trade," Agricultural Economics, Blackwell, pages 269-277.
    8. Dean Yang, 2008. "Can Enforcement Backfire? Crime Displacement in the Context of Customs Reform in the Philippines," The Review of Economics and Statistics, MIT Press, pages 1-14.
    9. D. Miljkovic & R. Zhuang, 2011. "The exchange rate pass-through into import prices: the case of Japanese meat imports," Applied Economics, Taylor & Francis Journals, vol. 43(26), pages 3745-3754.
    10. Rezitis, Anthony N. & Brown, A. Blake, 1999. "Pass-through of exchange rates and tariffs in Greek-US tobacco trade," Agricultural Economics, Blackwell, pages 269-277.
    11. David Hummels & Volodymyr Lugovskyy, 2006. "Are Matched Partner Trade Statistics a Usable Measure of Transportation Costs?," Review of International Economics, Wiley Blackwell, vol. 14(1), pages 69-86, February.
    12. Justin Marion & Erich Muehlegger, 2008. "Measuring Illegal Activity and the Effects of Regulatory Innovation: Tax Evasion and the Dyeing of Untaxed Diesel," Journal of Political Economy, University of Chicago Press, vol. 116(4), pages 633-666, August.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    safeguard tariff; price disparity; tax incidence;

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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