On Measuring Consumer Welfare Effects of Trade Reform

Sophia Huang and Kuo Huang

No 25480, 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia from International Association of Agricultural Economists

Abstract: We develop a measure of consumer welfare by approximating Hicksian compensating variation as a function of all commodity prices and compensated price elasticities. The unique feature of this approach is that all direct- and cross-commodity effects of a demand system are incorporated into the welfare measurement. This approach is useful for developing an instrumental model to evaluate the consumer welfare effects of trade reform. For illustration, the proposed procedure is applied to Taiwan's meat industry, and various scenarios are considered to show the effects of eliminating meat tariff rates on the quantities of meat demanded and on the savings of meat expenditures.

Keywords: Consumer/Household Economics; International Relations/Trade (search for similar items in EconPapers)
Pages: 7
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae06:25480

DOI: 10.22004/ag.econ.25480

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