The Price Effect of Tariff Liberalization in Morocco: Measuring the Impact on Household Welfare

Mouna Cherkaoui (), Ayache Khellaf and Abdelaziz Nihou
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Mouna Cherkaoui: University of Mohamed V

No 637, Working Papers from Economic Research Forum

Abstract: This study analyses the distributive effects of tariff liberalization in Morocco. The results indicate that the impact on the household both as income earners and as consumers varies depending on whether the household is urban or rural. The pass-through is positive and significant but is smaller than expected. It stands at 13% for agricultural goods and at 16% percent for manufactured goods. The results show that liberalization has reduced the consumer prices of both the agricultural and manufactured goods and led to an increase of wages. The reduction in the prices of the goods meant an amelioration of household welfare however households that were net suppliers of agricultural goods saw their revenue decline. The overall effect of the reduction in tariffs is positive and leads to an increase in aggregate household income at 2.7%. This is due primarily to an increase in spending of 2.8% and of wages for 0.8%. The losses due to the reduction in the price of agricultural products are estimated at 0.9%.

Pages: 18
Date: 2011-01-10, Revised 2011-01-10
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