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A General Welfare Decomposition for CGE Models

  • Hanslow, Kevin

January 2000 Huff and Hertel (2001) derive a welfare decomposition for the equivalent variation in the GTAP Model. The derivation appears to be very specific to GTAP. Nevertheless, it contains nearly all the ingredients required for performing welfare decomposition for any CGE model. In this paper, the approach of Huff and Hertel (2001) is generalised to derive a welfare decomposition that can be applied to most, if not all, CGE models. General production and utility functions are accommodated, as are foreign income flows. A brief guide to coding the proposed welfare decomposition in GEMPACK is also provided. The decomposition is applied to decomposing the equivalent variation in GTAP.

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Paper provided by Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University in its series GTAP Technical Papers with number 498.

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Date of creation: 2000
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Handle: RePEc:gta:techpp:498
Note: GTAP Technical Paper No. 19
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