Editor's choice Assessing the Price-Raising Effect of Non-Tariff Measures in Africa

Olivier Cadot and Julien Gourdon

Journal of African Economies, 2014, vol. 23, issue 4, 425-463

Abstract: In spite of widespread tariff reductions, intra-African borders remain ‘thick’. Regional trade is inhibited by inadequate transportation infrastructure but also by various non-tariff measures (NTMs). This paper combines price data from the World Bank's International Comparison Project with a new database on NTMs to estimate their effect on consumer prices for selected consumption products. Results based on panel regressions on 1,260 country-product pairs suggest that, after controlling for tariffs, systematic cross-country cost-of-living differences, and product-specific unobservables, sanitary and phytosanitary measures contribute to raise the price of African foodstuffs by 14%. At the product level, rice and other cereals, some types of meat (e.g. poultry) and edible oils tend to fetch high ad-valorem equivalents. Combining our estimates with data on household expenditure patterns from Kenya's household survey, we show that the effect is regressive, raising the cost of living by 9% for poor households.

Date: 2014
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Working Paper: Assessing the price-raising effect of non-tariff measures in Africa (2012)
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