Non-tariff barriers and consumer prices: evidence from Brexit

Jan Bakker, Nikhil Datta, Richard Davies and Joshua De Lyon

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Non-Tariff Barriers (NTBs) are the main policy impediment to international trade, yet little is known about their pass-through to prices. This paper exploits the Brexit trade policy shock to quantify how NTBs affect consumer prices and welfare. The increase in NTBs raised prices by 6%, implying a pass-through of 50-80%. Based on a standard welfare framework, we show households lost £5.84bn, domestic producers gained £4.78bn, and £1.06bn was lost through deadweight loss. Due to differences in food expenditure shares, households in the lowest decile experience a 52% higher increase in the cost of living than households in the top decile.

Keywords: Brexit; policy; shocks; wellbeing; welfare; cost of living; non-tariff barriers (search for similar items in EconPapers)
JEL-codes: E31 F13 F15 Q11 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2022-12-01
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://eprints.lse.ac.uk/118040/ Open access version. (application/pdf)

Related works:
Working Paper: Non-tariff barriers and consumer prices: evidence from Brexit (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:118040

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