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Agricultural Trade, Liberalization, Productivity Gain, and Poverty Alleviation: a General Equilibrium Analysis

Nadia Belhaj Hassine (), Véronique Robichaud and Bernard Decaluwe ()

Working Papers MPIA from PEP-MPIA

Abstract: Computable General Equilibrium (CGE) models have gained continuously in popularity as an empirical tool for assessing the impact of trade liberalization on agricultural growth, poverty, and income distribution. However, conventional models ignore the channels linking technical change in agriculture, trade openness, and poverty. This study seeks to incorporate econometric evidence of these linkages into a CGE model to estimate the impact of alternative trade liberalization scenarios on poverty and equity. The analysis uses the Latent Class Stochastic Frontier Model (LCSFM) and the metafrontier function to investigate the influence of trade openness on agricultural technological change. The estimated productivity effects induced from higher levels of trade are combined with a general equilibrium analysis of trade liberalization to evaluate the income and price changes. These effects are then used to infer the impact on poverty and inequality following the top-down approach. The model is applied to Tunisian data using the social accounting matrix of 2001 and the 2000 household expenditures surveys. Poverty is found to decline under agricultural and full trade liberalization and this decline is much more pronounced when the productivity effects are included.

Keywords: Openness; Agriculture; Productivity; Poverty; CGE modeling (search for similar items in EconPapers)
JEL-codes: C24 C33 D24 F43 I32 Q17 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-agr and nep-int
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Working Paper: Agricultural Trade Liberalization, Productivity Gain and Poverty Alleviation: A General Equilibrium Analysis (2010) Downloads
Working Paper: Agricultural Trade Liberalization, Productivity Gain and Poverty Alleviation: a General Equilibrium Analysis (2010) Downloads
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