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Welfare-ranking ad valorem and specific tariffs under monopolistic competition

Jan Jørgensen and Philipp Schröder

Canadian Journal of Economics, 2005, vol. 38, issue 1, 228-241

Abstract: Actual trade and tariff policy prefers ad valorem tariffs to specific tariffs. Yet in this paper we show that, in a setting of monopolistic competition, realizing a given restriction on imports via a specific tariff would generate more consumer utility than obtaining the same restriction via an ad valorem tariff.

JEL-codes: F12 (search for similar items in EconPapers)
Date: 2005
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Handle: RePEc:cje:issued:v:38:y:2005:i:1:p:228-241