Armington elasticities and tariff regime: an application to European Union rice imports

Abstract : The European Union's (EU) import sources for rice include developing countries and least developed countries (LDCs). The EU has made a commitment to allow duty-free and quota-free access to rice imports originating in the LDCs from September 2009 onward. The purpose of this article is to answer two questions: (1) does the inclusion of import tariffs lead to different estimated Armington elasticities? (2) when a discriminating tariff is introduced, what happens to the market share of large rice exporters to the EU, especially of poor countries? We present the Armington model, derived from a constant elasticity of substitution (CES) utility function, and a non-homothetic CES utility functional form, which is more flexible. We then estimate the Armington model, with and without the inclusion of a tariff, and we compare the elasticities. Lastly, we model five scenarios with different discriminated import tariff rates to calculate the changes in the market access of large rice exporters to the EU. Our empirical results show the importance of non-homothetic preferences and import tariffs. Ignoring import tariffs and the non-homothetic parameter may produce results which are biased and of uncertain validity. Furthermore, the simulation findings demonstrate that, in spite of a large difference between import tariff rate of Suriname and other countries (scenario V), its market access would not change greatly. This may be caused by supply side problems like poor infrastructures, weak technology and small capacity production in LDCs.
Type de document :
Article dans une revue
Journal of agricultural economics , 2009, 60 (3), pp.586-603
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Soumis le : vendredi 7 septembre 2012 - 16:04:04
Dernière modification le : mercredi 4 avril 2018 - 09:58:57

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  • HAL Id : hal-00729954, version 1

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Marilyne Huchet-Bourdon, Esmaeil Pishbahar. Armington elasticities and tariff regime: an application to European Union rice imports. Journal of agricultural economics , 2009, 60 (3), pp.586-603. 〈hal-00729954〉

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