Choosing the best model in the presence of zero trade: a fish product analysis

Nhuong Tran, Norbert Wilson () and Diane Hite

No 142790, 2012: New Rules of Trade? December 2012, San Diego, California from International Agricultural Trade Research Consortium

Abstract: The purpose of the paper is to test the hypothesis that food safety (chemical) standards act as barriers to international seafood imports. We use zero-accounting gravity models to test the hypothesis that food safety (chemical) standards act as barriers to international seafood imports. The chemical standards on which we focus include chloramphenicol required performance limit, oxytetracycline maximum residue limit, fluoro-quinolones maximum residue limit, and dichlorodiphenyltrichloroethane (DDT) pesticide residue limit. The study focuses on the three most important seafood markets: the European Union’s 15 members, Japan, and North America. Our empirical results confirm the hypothesis and are robust to the OLS as well as alternative zero-accounting gravity models such as the Heckman estimation and the Poisson family regressions. For the choice of the best model specification to account for zero trade and heteroskedastic issues, it is inconclusive to base on formal statistical tests; however the Heckman sample selection and zero-inflated negative binomial (ZINB) models provide the most reliable parameter estimates based on the statistical tests, magnitude of coefficients, economic implications, and the literature findings. Our findings suggest that continually tightening of seafood safety standards has had a negative impact on exporting countries. Increasing the stringency of regulations by reducing analytical limits or maximum residue limits in seafood in developed countries has negative impacts on their bilateral seafood imports. The paper furthers the literature on food safety standards on international trade. We show competing gravity model specifications and provide additional evidence that no one gravity model is superior.

Keywords: Food; Consumption/Nutrition/Food; Safety (search for similar items in EconPapers)
Pages: 35
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Book: Choosing the best model in the presence of zero trade: a fish product analysis (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iat12m:142790

DOI: 10.22004/ag.econ.142790

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