IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/19418.html
   My bibliography  Save this paper

Protection for sale without aggregation bias

Author

Listed:
  • Solleder, Jean-Marc
  • Silvy, Fulvio
  • Olarreaga, Marcelo

Abstract

Estimates of Grossman and Helpman (1994) "Protection For Sale" (PFS) model yield unrealistically high estimates of the weight governments put on social welfare relative to lobbying contributions, with estimates of the former often being more than ten times larger than the latter. We argue this is due to the level of aggregation at which the model has been estimated so far. While protection is determined at the tariff line level, production data is only available at the industry level. Using a new production dataset at the tariff level, our estimates confirm the presence of aggregation bias when estimating the PFS model at the industry level. At the tariff line level, the average weight on social welfare in a sample of 146 countries declines by 80 percent.

Suggested Citation

  • Solleder, Jean-Marc & Silvy, Fulvio & Olarreaga, Marcelo, 2024. "Protection for sale without aggregation bias," CEPR Discussion Papers 19418, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:19418
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP19418
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Protection for sale; Aggregation bias;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:19418. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.