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


  • Rigoberto A. Lopez
  • Ibrahima Hathie


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

  • 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.
  • Handle: RePEc:zwi:fpcrep:069

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    References listed on IDEAS

    1. Rigoberto A. Lopez, 2001. "Campaign Contributions and Agricultural Subsidies," Economics and Politics, Wiley Blackwell, vol. 13(3), pages 257-279, November.
    2. Trefler, Daniel, 1993. "Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 138-160, February.
    3. 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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    5. Giovanni Maggi & Pinelopi Koujianou Goldberg, 1999. "Protection for Sale: An Empirical Investigation," American Economic Review, American Economic Association, vol. 89(5), pages 1135-1155, December.
    6. Eric J. Bartelsman & Wayne Gray, 1996. "The NBER Manufacturing Productivity Database," NBER Technical Working Papers 0205, National Bureau of Economic Research, Inc.
    7. Devashish Mitra, 1999. "Endogenous Lobby Formation and Endogenous Protection: A Long-Run Model of Trade Policy Determination," American Economic Review, American Economic Association, vol. 89(5), pages 1116-1134, December.
    8. Clinton Shiells & Robert Stern & Alan Deardorff, 1989. "Estimates of the elasticities of substitution between imports and home goods for the United States: Reply," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 125(2), pages 371-374, June.
    9. 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.
    10. Robert C. Feenstra, 1996. "U.S. Imports, 1972-1994: Data and Concordances," NBER Working Papers 5515, National Bureau of Economic Research, Inc.
    11. Elena Lopez & Emilio Pagoulatos, 2002. "Estimates and Determinants of Armington Elasticities for the U.S. Food Industry," Journal of Industry, Competition and Trade, Springer, vol. 2(3), pages 247-258, September.
    12. Ulrich R. Kohli, 1982. "Relative Price Effects and the Demand for Imports," Canadian Journal of Economics, Canadian Economics Association, vol. 15(2), pages 205-219, May.
    13. Anderson, Kym, 1980. "The Political Market for Government Assistance to Australian Manufacturing Industries," The Economic Record, The Economic Society of Australia, vol. 56(153), pages 132-144, June.
    14. Rodrik, Dani, 1995. "Political economy of trade policy," Handbook of International Economics,in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 28, pages 1457-1494 Elsevier.
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