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Welfare versus market access : the implications of tariff structure for tariff reform

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  • James E. Anderson
  • J. Peter Neary

Abstract

We show that the effects of tariff changes on welfare and import volume can be fully characterised by their effects on the generalised mean and variance of the tariff distribution. Using these tools, we derive new results for welfare- and market-access-improving tariff changes, which imply two "cones of liberalisation" in price space. Because welfare is negatively but import volume positively related to the generalised variance, the cones do not intersect, which poses a dilemma for trade policy reform. Finally, we show that generalised and trade-weighted moments are mutually proportional when the trade expenditure function is CES.

Suggested Citation

  • James E. Anderson & J. Peter Neary, 2004. "Welfare versus market access : the implications of tariff structure for tariff reform," Working Papers 200423, School of Economics, University College Dublin.
  • Handle: RePEc:ucn:wpaper:200423
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    File URL: http://hdl.handle.net/10197/1266
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    References listed on IDEAS

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    1. James E. Anderson & J. Peter Neary, 1996. "A New Approach to Evaluating Trade Policy," Review of Economic Studies, Oxford University Press, vol. 63(1), pages 107-125.
    2. Feenstra, Robert C., 1995. "Estimating the effects of trade policy," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 30, pages 1553-1595, Elsevier.
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    More about this item

    Keywords

    Concertina rule; Market access; Piecemeal policy reform; Tariff moments; Uniform tariff reductions; Commercial policy; International economic integration; Tariff;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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