Using Survey Data to Assess the Distributional Effects of Trade Policy

By G. Porto. 2003

318 citations recorded by the source corpus.

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.

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/90930bf23f2551f0b43b21fe48a1b83758543f3c

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Citations in the corpus

Retail Globalization and Household Welfare: Evidence from Mexico (2015, background): “…and Tarozzi (2000), or on household consumption surveys in combination with simulated price changes at the level of aggregate product groups as in Porto (2006) and earlier work by Deaton (1989), or relying on cross-country trade flows as in Caron et al. (2012) and Fajgelbaum and Khandelwal…”
Predicting the poverty impacts of trade reform (2004, methodology): “Porto (2003a, 2003b) offers a natural generalization of Ravallion’s work for the case of Argentina.”
Exporting Out of Poverty: Provincial Poverty in Vietnam and U.S. Market Access (2011, background): “Porto (2003) estimates the impact of possible domestic 3 See Hallack and Levinsohn (2004) for a recent review of the trade and growth literature.”
Distributional Effects of Globalization in Developing Countries (2007, background): “Porto (2006) is the only study that explicitly considers how trade policy affects the welfare distribution through consumption.”
Trade, Inequality, and Poverty: What Do We Know? (2004, unknown): “We will however refer to one recent empirical study (Porto (2004a)) that employs a general-equilibrium approach to illustrate how labor market and consumption effects work together to affect poverty.”
Labor Market Effects of Social Programs: Evidence from India's Employment Guarantee (2015, background): “In this sense, it is a measure of the welfare e ect of the program and is often referred to as the compensating variation (Porto, 2006).”
Commitment to Equity Handbook (2018, methodology): “97) note that “even the most attractive reforms will typically result in some house holds losing,” and recent efforts to mea sure welfare impact at the house hold level have been made following Porto (2006). Nevertheless, because results are presented at some aggregate level (e.”
Food Prices, Wages, and Welfare in Rural India (2013, unknown): “A related issue is that prices or unit values obtained from household expenditure surveys (as in Marchand 2012; Porto 2006) may not reflect the wholesale prices faced by farmers in a particular region, especially where government intervention is heavy (as in India). nontradable price elasticity…”