Analysing effects of trade liberalization on household expenditure with an extended version of the GTAP model: The case of Mexico

Aida Gonzalez Mellado

No 331740, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: The analysis of expenditures for different household categories in developing countries within a CGE framework is a helpful instrument for economists and policy makers. This approach allows researchers to focus on the possible effects that macroeconomic changes and trade reforms might have on household categories. This paper presents a new household expenditure estimation methodology and an application of a complete household demand system to be integrated into the GTAP model. The complete demand system regarded in this approach is the one proposed by DEATON and MUELLBAUER (1980) the Almost Ideal Demand System in its linear version (LAIDS). The LAIDS contains a set of demand functions defining how commodities are allocated by households in function of prices and household preferences. The integration of household categories into the GTAP model is envisaged by the integration of elasticities coming from the LAIDS. The data used in this study to analyse commodity acquisition behaviour of ten household categories are from the 2002-2005 National Household Income and Expenditures (ENIGH) conducted by National Institute of Statistical Geography and Informatics (INEGI) in Mexico.

Keywords: International Relations/Trade; Consumer/Household Economics (search for similar items in EconPapers)
Pages: 41
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:331740

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