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Income Distributional Impacts of Trade Policies in a Multi-Market Framework: A Case in Pakistan

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  • Hudson, Darren
  • Ethridge, Don

Abstract

The impacts of using export taxes as a price control in a multi-market framework are explored using the cotton and yarn sectors in Pakistan as examples. Results show that the export tax on cotton increased domestic consumption and decreased exports of cotton in Pakistan, transferring income from cotton producers to yarn spinners and the government. There was a social loss to Pakistan in the cotton sector. The export tax on cotton increased domestic yarn production, consumption, exports, and incomes of yarn spinners, but resulted in a large transfer (social loss) out of the yarn sector.

Suggested Citation

  • Hudson, Darren & Ethridge, Don, 2000. "Income Distributional Impacts of Trade Policies in a Multi-Market Framework: A Case in Pakistan," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 32(1), pages 49-61, April.
    • Handle: RePEc:cup:jagaec:v:32:y:2000:i:01:p:49-61_02
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    References listed on IDEAS

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    1. Ender, Gary, 1990. "Government Intervention in Pakistan's Cotton Sector," Staff Reports 278334, United States Department of Agriculture, Economic Research Service.
    2. Philip L. Paarlberg, 1995. "Agricultural Export Subsidies and Intermediate Goods Trade," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(1), pages 119-128.
    3. Brander, James A. & Spencer, Barbara J., 1985. "Export subsidies and international market share rivalry," Journal of International Economics, Elsevier, vol. 18(1-2), pages 83-100, February.
    4. Adelman, Irma, 1984. "Beyond export-led growth," World Development, Elsevier, vol. 12(9), pages 937-949, September.
    5. Robert S. Pindyck & Paul W. MacAvoy, 1975. "Price Controls and the Natural Gas Shortage," Books, American Enterprise Institute, number 917568, September.
    6. Deacon, Robert T. & Sonstelie, Jon, 1989. "Price controls and rent-seeking behavior in developing countries," World Development, Elsevier, vol. 17(12), pages 1945-1954, December.
    7. Adelman, Irma, 1984. "Beyond export-led growth," CUDARE Working Paper Series 309, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
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    Cited by:

    1. Hudson, Darren, 2000. "The World Trade Organization And Southern Agriculture: The Cotton Perspective," Professional Papers 15804, Mississippi State University, Department of Agricultural Economics.
    2. Schmitz, Troy G., 2002. "Measuring Inefficiency In The Presence Of An Export Tax, An Import Tariff, And A State Trading Enterprise," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(01), pages 1-13, April.
    3. Ying Lin & Henry W. Kinnucan, 2020. "The optimal export tax for a primary commodity in a vertical market," Agricultural Economics, International Association of Agricultural Economists, vol. 51(6), pages 909-922, November.

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