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Welfare Analysis of a Prohibitive NTM in a Society with a Proportion of Concerned Consumers

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  • M. Mahdi Ghodsi

    (Faculty of Economic Sciences, University of Warsaw; Department of Economic Sciences of Catholic University of Milan)

Abstract

The aim of this contribution is to provide a cost-benefit analysis in a partial equilibrium framework to investigate the welfare consequences of a non-tariff measure (NTM). The important issue of the analysis is having two groups of indifferent and concerned consumers. The ultimate aim of the paper is to investigate whether or not the paternalistic behavior of government is in line with the willingness of the consumers for demand. The existence of information about the origin of goods is the leading issue of the analysis that provides two different scenarios. The model is calibrated with data on consumption of shrimps. The findings suggest that in the existence of such information, NTM policy has the lowest international losses and highest domestic gains. The policy implication of these results suggests that governments should try to increase the information in the market when they are following good faith for imposition of NTM.

Suggested Citation

  • M. Mahdi Ghodsi, 2013. "Welfare Analysis of a Prohibitive NTM in a Society with a Proportion of Concerned Consumers," Working Papers 2013-12, Faculty of Economic Sciences, University of Warsaw.
    • Handle: RePEc:war:wpaper:2013-12
    as

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    File URL: http://www.wne.uw.edu.pl/inf/wyd/WP/WNE_WP97.pdf
    File Function: First version, 2013
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    welfare; trade policy; non-tariff measures; technical barriers to trade;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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