A tale of pork prices: evasion and attenuation of a Japanese tariff

Kazuki Onji

Trade Working Papers from East Asian Bureau of Economic Research

Abstract: This paper empirically examines the effectiveness of a safeguard tariff in the Japanese market for imported pork parts. The goals are, first, to consider a refinement to the traditional market-based method for evasion detection, and, second, to apply the method in a setting where evasion is suspected to be widespread. Utilising a within-pig variation in tariff burdens and the timing of safeguard invocations, I examine a panel of monthly wholesale prices on narrowly-defined pork products from 2001 through 2008. The results are consistent with a hypothesis that a widespread evasion nullified the safeguard tariff on pork, and are robust to a range of alternative explanations including the adjustment of profit margins by traders. Safeguard tariffs appear to be a simple mechanism, but behavioural responses can undo the policy intent.

Keywords: safeguard tariff; price disparity; tax incidence (search for similar items in EconPapers)
JEL-codes: F13 H22 H26 L11 Q17 (search for similar items in EconPapers)
Date: 2009-01
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Citations: View citations in EconPapers (2)

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