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Shipping the good beef out: EU trade liberalization to Mercosur exports
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In this article, the authors illustrate the issues at stake in the beef sector, focusing on Mercosur exports to the EU and derive comparative statics results for changes in various policy variables.Abstract:
The European Union tariff schedule includes a large number of specific and composite tariffs as well as many tariff-rate quotas (TRQs), which affect the composition of imports. By altering price ratios between products with different unit values, both can generate the typical Alchian-Allen 'shipping the good apples out' effect in foreign countries' exports to the EU. Different patterns of trade liberalization, either through tariff reduction or an expansion in preferential-access quotas, might have different consequences for producers and consumers because of changes in the composition of trade. We illustrate the issues at stake in the beef sector, focusing on Mercosur exports to the EU. We model import demand for different qualities in the presence of a TRQ and we derive comparative statics results for changes in various policy variables.read more
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References
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Product quality and the direction of trade
TL;DR: This article developed an empirical framework to estimate the empirical relevance of this prediction and identified the effect of quality operating on the demand side through the relationship between per capita income and aggregate demand for quality.
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Shipping the Good Apples Out? An Empirical Confirmation of the Alchian‐Allen Conjecture
David Hummels,Alexandre Skiba +1 more
TL;DR: In this article, the authors derive a relationship between per unit and ad valorem trade costs and the quality composition of trade and show that these results cannot be explained by monopoly pricing-to-market behavior.
Posted Content
Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture
David Hummels,Alexandre Skiba +1 more
TL;DR: In this article, the authors model demand for quality differentiated goods to derive a relationship between trade costs and the quality composition of trade, and use detailed data on traded goods' prices, quantities and shipping costs for many importers and exporters to test these predictions.