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Extending the GTAP framework for public procurement analysis

Angel Aguiar Román (), Caitlyn Carrico, Thomas Hertel (), Zekarias Hussein, Robert McDougall and Badri G Narayanan ()

GTAP Working Papers from Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University

Abstract: This paper extends the GTAP framework to aid in the analysis of changes to public procurement policies. In terms of data developments, government investment demand data is estimated for each of the 57 GTAP Commodities in the 140 regions of version 9. In addition, the origin of imports by end use (i.e., for firms, private consumption, government consumption, and investment) is determined following the recent literature. Another layer of valuation is also introduced, which captures the preferences towards domestic production. In terms of model extensions, there is a new nest in the production structure that allows for different procurement regimes, and the origin of imports by agents’ end use is incorporated. We illustrate this framework by simulating the impact of a hypothetical reduction in the domestic preference in one of the newly introduced procurement regimes. Future work should focus on estimation of these domestic preference margins.

Date: 2016
New Economics Papers: this item is included in nep-int
Note: GTAP Working Paper No. 82
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