Technology, Ecology and Agricultural Trade

Kari E.R. Heerman

No 170083, 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota from Agricultural and Applied Economics Association

Abstract: I introduce a novel general equilibrium framework for agricultural trade policy analysis with heterogeneous producers in which agro-ecological characteristics in uence patterns of specialization within the sector and trade costs are product-specific. This induces substantial variation in market share elasticities with respect to trade costs, with the largest magnitude elasticities between countries most likely to compete head-to-head in the same products. The model is thus able to generate more nuanced predictions for how bilateral agricultural trade and production patterns shift in response to changes in policy than existing models. I draw on techniques pioneered in the discrete choice literature to estimate parameters that describe the distribution of productivity and trade costs across products. This approach has the considerable advantage of allowing me to solve a product-level conceptual model with little data beyond what is used in a standard gravity model. This framework promises to allow researchers to make more informed predictions for how global agricultural trade and production patterns shift in response to policy change.

Keywords: Agricultural and Food Policy; International Relations/Trade; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 55
Date: 2014
New Economics Papers: this item is included in nep-agr, nep-dcm and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea14:170083

DOI: 10.22004/ag.econ.170083

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