On the Trade and Price Effects of Preferential Trade Agreements

12  January 2012    4:00 pm CET

Neil Foster, wiiw; (with Rod Falvey)

In cooperation with:


wiiw, Rahlgasse 3, 1060 Vienna, lecture hall (entrance from the ground floor)


In this paper we extend recent work using the Gravity Model to estimate the trade and price effects of Preferential Trading Arrangements (PTAs), by explicitly taking into account the extent of the preferential access being provided by the importer. This involves specifying a trade model, deriving appropriate PTA variables, appending them to a gravity-type equation and estimating it. Estimates of the relative price effects of PTAs are derived and a range of PTAs are considered.