Import Demand Elasticities and Trade Distortions

By H. Kee, Alessandro Nicita, Marcelo Olarreaga. 2004

562 citations recorded by the source corpus.

To study the effects of tariffs on gross domestic product (GDP), one needs import demand elasticities at the tariff line level that are consistent with GDP maximization. These do not exist. The authors modify Kohli's (1991) GDP function approach to estimate demand elasticities for 4,625 imported goods in 117 countries. Following Anderson and Neary (1992, 1994) and Feenstra (1995), they use these estimates to construct theoretically sound trade restrictiveness indices, and GDP losses associated with existing tariff structures. Countries are revealed to be 30 percent more restrictive than their simple or import-weighted average tariffs would suggest. Thus, distortion is nontrivial. GDP losses are largest in China, Germany, India, Mexico, and the United States.

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/8b60cfb80347dc43c9c64980ad6706f13bf14c8f

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

In Strategy and Management

Citations in the corpus

Is Protectionism on the Rise? Assessing National Trade Policies during the Crisis of 2008 (2013, methodology): “We modify the multilateral import demand elasticity estimates in Kee et al. (2008) to obtain bilateral import demand elasticities.”
Trade, Production, and Protection Database, 1976–2004 (2007, methodology): “The methodology used to estimate the import demand elasticities is described in detail in Kee, Nicita, and Olarreaga (2004).”
Estimating the effects of non‐discriminatory trade policies within structural gravity models (2017, unknown): “…For example, Anderson and van Wincoop (2003), de Sousa et al. 13 Export supply elasticities at the product level have been estimated previously by Kee et al. (2004), Broda et al. (2006), Broda et al. (2008), Tokarick (2014), Imbs and Mejean (2015), Imbs and Mejean (2017) and Nicita et al. (2018).”
Domestic Value Added in Exports: Theory and Firm Evidence from China (2015, unknown): “We will be able to test these restrictions when we estimate αID based on (14) and construct σt from (17).”
Determinants of Global Value Chain Participation: Cross-Country Evidence (2020, unknown): “Our choice is to use import demand elasticity estimates from Kee, Nicita, and Olarreaga (2008) which are available for more than 100 importing countries, thus ensuring very good coverage of our sample.”