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Assessing the Price-Raising Effect of Non-Tariff Measures in Africa1

Assessing the Price-Raising Effect of Non-Tariff Measures in Africa1 In spite of widespread tariff reductions, intra-African borders remain thick. Regional trade is inhibited by inadequate transportation infrastructure but also by various non-tariff measures (NTMs). This paper combines price data from the World Bank's International Comparison Project with a new database on NTMs to estimate their effect on consumer prices for selected consumption products. Results based on panel regressions on 1,260 country-product pairs suggest that, after controlling for tariffs, systematic cross-country cost-of-living differences, and product-specific unobservables, sanitary and phytosanitary measures contribute to raise the price of African foodstuffs by 14. At the product level, rice and other cereals, some types of meat (e.g. poultry) and edible oils tend to fetch high ad-valorem equivalents. Combining our estimates with data on household expenditure patterns from Kenya's household survey, we show that the effect is regressive, raising the cost of living by 9 for poor households. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of African Economies Oxford University Press

Assessing the Price-Raising Effect of Non-Tariff Measures in Africa1

Journal of African Economies , Volume 23 (4) – Aug 18, 2014

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References (44)

Publisher
Oxford University Press
Copyright
The author 2014. Published by Oxford University Press on behalf of the Centre for the Study of African Economies. All rights reserved. For permissions, please email: journals.permissionsoup.com
ISSN
0963-8024
eISSN
1464-3723
DOI
10.1093/jae/eju007
Publisher site
See Article on Publisher Site

Abstract

In spite of widespread tariff reductions, intra-African borders remain thick. Regional trade is inhibited by inadequate transportation infrastructure but also by various non-tariff measures (NTMs). This paper combines price data from the World Bank's International Comparison Project with a new database on NTMs to estimate their effect on consumer prices for selected consumption products. Results based on panel regressions on 1,260 country-product pairs suggest that, after controlling for tariffs, systematic cross-country cost-of-living differences, and product-specific unobservables, sanitary and phytosanitary measures contribute to raise the price of African foodstuffs by 14. At the product level, rice and other cereals, some types of meat (e.g. poultry) and edible oils tend to fetch high ad-valorem equivalents. Combining our estimates with data on household expenditure patterns from Kenya's household survey, we show that the effect is regressive, raising the cost of living by 9 for poor households.

Journal

Journal of African EconomiesOxford University Press

Published: Aug 18, 2014

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