Using Survey Data to Assess the Distributional Effects of Trade Policy

The author develops and applies a methodology to empirically explore the effects of trade policies on the distribution of income and poverty in developing countries. He uses a methodology based on two links-one connecting trade policies to prices, and another connecting prices to household welfare. The author applies the methodology to the study of the distributional effects of Mercosur on Argentine families. The main finding is that Mercosur benefits the average Argentine household across the entire income distribution. There is evidence of a pro-poor bias of the regional trade agreement: on average, poor households gain more from the reform than middle-income households, whereas the effects on rich families are positive but not statistically significant. Prior to the reform, Argentine trade policy protected the rich over the poor, and after the reform, granted some protection to the poor. As relative pre-Mercosur tariffs are higher on relatively skill-intensive goods, the tariff removals tend to benefit the poor over the rich. These findings indicate that trade reforms may actually help improve the distribution of income and reduce poverty in the country.

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Bibliographic Details
Main Author: Porto, Guido G.
Format: Policy Research Working Paper biblioteca
Language:English
en_US
Published: World Bank, Washington, DC 2003-09
Subjects:BENCHMARK, COCOA PRICES, COMPENSATING VARIATION, COMPETITIVE MARKETS, CONSTANT RETURNS TO SCALE, CONSUMER PRICES, CONSUMERS, DEMAND ANALYSIS, DEREGULATION, DOMESTIC MARKETS, ELASTICITIES, ELASTICITY, ENDOGENOUS VARIABLES, ENGEL CURVE, ENGEL CURVES, EQUILIBRIUM, EQUILIBRIUM PRICES, EXCHANGE RATES, EXOGENOUS VARIABLES, FACTOR DEMAND, FACTOR PRICES, FINANCIAL CRISIS, FUNCTIONAL FORMS, GDP, GINI COEFFICIENT, IMPORTS, INCOME, INCOME DISTRIBUTION, INCOME EFFECTS, INCOME INEQUALITY, INCOME LEVELS, INFLATION, LABOR MARKET, LEGISLATION, LEISURE, MARKET ANALYSIS, OPEN ECONOMIES, PER CAPITA INCOME, PRICE ADJUSTMENT, PRICE CHANGES, PRICE ELASTICITIES, PRICE INDEX, PRICE INDICES, SAVINGS, SOCIAL WELFARE, SUBSTITUTION, TARIFF BARRIERS, TIME SERIES, TRADE LIBERALIZATION, TRADE POLICIES, TRADE REFORMS, UNEMPLOYMENT, WAGES, WELFARE EFFECTS, WELFARE FUNCTION, WORLD MARKETS SURVEY DATA, TRADE POLICY, DISTRIBUTION (ECONOMIC THEORY), INCOME DISTRIBUTION RESEARCH, PRICE POLICY, HOUSEHOLD WELFARE INDICATORS, REGIONAL TRADE AGREEMENTS, TARIFF POLICY, TRADE REGIME, MERCOSUR, HOUSEHOLD EXPENDITURE SURVEYS, NONPARAMETRIC STATISTICS, WORLD MARKETS, SURVEY DATA,
Online Access:http://documents.worldbank.org/curated/en/2003/09/2534253/using-survey-data-assess-distributional-effects-trade-policy
http://hdl.handle.net/10986/18056
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