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The Combination of Gravity and Welfare Approaches for Evaluating Non-Tariff Measures

Author

Listed:
  • Anne-Célia Disdier

    () (ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - AgroParisTech)

  • Stéphan Marette

    () (ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - AgroParisTech)

Abstract

This article explores the link between gravity and welfare frameworks for measuring the impact of nontariff measures. First, an analytical approach suggests how to combine a gravity equation with a partial equilibrium model to determine the welfare impact of nontariff measures. Second, an empirical application focuses on the effects of a standard that caps antibiotic residues in crustaceans in the United States, the European Union, Canada, and Japan. While the econometric estimation of the gravity equation reports a negative impact on imports, welfare evaluations show that in most cases, a stricter standard leads to an increase in both domestic and international welfare.

Suggested Citation

  • Anne-Célia Disdier & Stéphan Marette, 2010. "The Combination of Gravity and Welfare Approaches for Evaluating Non-Tariff Measures," Post-Print halshs-00825280, HAL.
  • Handle: RePEc:hal:journl:halshs-00825280
    DOI: 10.1093/ajae/aaq026
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00825280
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    References listed on IDEAS

    as
    1. Chengyan Yue & John C. Beghin, 2017. "Tariff Equivalent And Forgone Trade Effects Of Prohibitive Technical Barriers To Trade," World Scientific Book Chapters, in: John Christopher Beghin (ed.),Nontariff Measures and International Trade, chapter 8, pages 139-150, World Scientific Publishing Co. Pte. Ltd..
    2. Sven M. Anders & Julie A. Caswell, 2007. "Standards as Barriers Versus Standards as Catalysts: Assessing the Impact of HACCP Implementation on U.S. Seafood Imports," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(2), pages 310-321.
    3. Baier, Scott L. & Bergstrand, Jeffrey H., 2009. "Bonus vetus OLS: A simple method for approximating international trade-cost effects using the gravity equation," Journal of International Economics, Elsevier, vol. 77(1), pages 77-85, February.
    4. Chengyan Yue & John Beghin & Helen H. Jensen, 2017. "Tariff Equivalent Of Technical Barriers To Trade With Imperfect Substitution And Trade Costs," World Scientific Book Chapters, in: John Christopher Beghin (ed.),Nontariff Measures and International Trade, chapter 9, pages 151-164, World Scientific Publishing Co. Pte. Ltd..
    5. Bergstrand, Jeffrey H, 1985. "The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 474-481, August.
    6. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    7. World Bank, 2004. "Saving Fish and Fisheries : Towards Sustainable and Equitable Governance of the Global Fishing Sector," World Bank Other Operational Studies 14391, The World Bank.
    8. Everett B. Peterson & David Orden, 2008. "Avocado Pests and Avocado Trade," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(2), pages 321-335.
    9. Pendell, Dustin L. & Leatherman, John & Schroeder, Ted C. & Alward, Gregory S., 2007. "The Economic Impacts of a Foot-And-Mouth Disease Outbreak: A Regional Analysis," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 39(s1), pages 19-33, October.
    10. Yue, Chengyan & Beghin, John C. & Jensen, Helen H., 2006. "AJAE Appendix: Tariff Equivalent of Technical Barriers to Trade with Imperfect Substitution and Trade Costs," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 88(4), pages 1-9, November.
    11. Yue, Chengyan & Beghin, John C., 2009. "“AJAE Appendix: The Tariff Equivalent and Forgone Trade Effects of Prohibitive Technical Barriers to Trade”," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 91(4), pages 1-5, January.
    12. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
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    More about this item

    Keywords

    Gravity equation; Nontariff measures; Seafood welfare;

    JEL classification:

    • F1 - International Economics - - Trade
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture

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