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Assessing the price-raising effect of non-tariff measures in Africa

Olivier Cadot and Julien Gourdon ()

Working Papers from CEPII research center

Abstract: In spite of widespread tariff reductions, intra-African borders remain thick. Regional trade is inhibited by inadequate transportation infrastructure, but also by various government-imposed measures. This paper combines price data from the World Bank’s International Comparison Project (ICP) with the new TRAINS database on non-tariff measures (NTMs) to estimate their effect on consumer prices for selected consumption products. Results based on panel regressions on 1260 country-product pairs suggest that, after controlling for tariffs, systematic cross-country cost-of-living differences, and product-specific unobservables, SPS 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 AVEs. 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.

Keywords: Ad-valorem equivalent; Price-raising impact of non tariff measures; Africa (search for similar items in EconPapers)
JEL-codes: F10 F11 F13 O55 (search for similar items in EconPapers)
Date: 2012-08
New Economics Papers: this item is included in nep-afr
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Journal Article: Editor's choice Assessing the Price-Raising Effect of Non-Tariff Measures in Africa (2014) Downloads
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