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Poverty Effects of the Philippines’ Tariff Reduction Program: Insights from a Computable General Equilibrium Analysis

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  • John Cockburn
  • Erwin L. Corong
  • Caesar B. Cororaton

Abstract

A computable general equilibrium micro‐simulation model is used to assess the economic and poverty impacts of tariff reduction in the Philippines. Tariff reduction induces consumers to substitute cheaper imported agricultural products for domestic goods, thereby resulting in a contraction in agricultural output. In contrast, tariff reduction reduces the domestic cost of production, benefiting the outward‐oriented and import‐dependent industrial sector. The national poverty headcount decreases marginally as lower consumer prices outweigh the nominal income reduction experienced by the majority of households. However, both the poverty gap and severity of poverty worsens, implying that the poorest of the poor become even poorer.

Suggested Citation

  • John Cockburn & Erwin L. Corong & Caesar B. Cororaton, 2008. "Poverty Effects of the Philippines’ Tariff Reduction Program: Insights from a Computable General Equilibrium Analysis," Asian Economic Journal, East Asian Economic Association, vol. 22(3), pages 289-319, September.
    • Handle: RePEc:bla:asiaec:v:22:y:2008:i:3:p:289-319
    DOI: 10.1111/j.1467-8381.2008.00279.x
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    References listed on IDEAS

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    Cited by:

    1. Zhang, Xiao-Guang, 2015. "Incorporating household survey data into a CGE model," Conference papers 332628, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. George Verikios & Xiao-guang Zhang, 2016. "Structural change and income distribution: the case of Australian telecommunications," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 21(4), pages 549-570, October.
    3. Zhang, Xiao-Guang, 2016. "Solving a partial equilibrium model in a CGE framework: the case of a BMS model," Conference papers 332742, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Verikios, George & Zhang, Xiao-guang, 2015. "Reform of Australian urban transport: A CGE-microsimulation analysis of the effects on income distribution," Economic Modelling, Elsevier, vol. 44(C), pages 7-17.
    5. Verikios, George & Zhang, Xiao-guang, 2013. "Structural change in the Australian electricity industry during the 1990s and the effect on household income distribution: A macro–micro approach," Economic Modelling, Elsevier, vol. 32(C), pages 564-575.
    6. Xiao-guang Zhang, 2017. "Solving a Partial Equilibrium Model in a CGE Framework: The Case of a Behavioural Microsimulation Model," International Journal of Microsimulation, International Microsimulation Association, vol. 10(3), pages 27-58.
    7. Balié, Jean & Minot, Nicholas & Valera, Harold Glenn A., 2021. "Distributional impacts of the rice tariffication policy in the Philippines," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 289-306.
    8. Cicowiez, Martin & Lofgren, Hans & Escobar, Pamela, 2017. "How Many Households Does a CGE Model Need and How Should They Be Disaggregated?," Conference papers 332827, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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