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Gainers and Losers from Trade Reform in Morocco

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  • Ravallion, Martin
  • Lokshin, Michael

Abstract

We use Morocco’s national survey of living standards to measure the short-term welfare impacts of prior estimates of the price changes attributed to various agricultural trade reform scenarios for de-protecting cereals — the country’s main foodstaple. We find small impacts on mean consumption and inequality in the aggregate. There are both gainers and losers and (contrary to past claims), the rural poor are worse off on average after de-protection. We decompose the aggregate impact on inequality into a “vertical” component (between people at different pre-reform welfare levels) and “horizontal” component (between people at the same pre-reform welfare). There is a large horizontal component, which dominates the vertical impact of full de-protection. The diverse impacts reflect a degree of observable heterogeneity in consumption behavior and income sources, with implications for social protection policies.

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  • Ravallion, Martin & Lokshin, Michael, 2004. "Gainers and Losers from Trade Reform in Morocco," Conference papers 331308, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331308
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