access to markets and rural poverty evidence from household consumption in china abstract this paper presents evidence on the effects of access to domestic and international markets on per capita consumption of households using data from rural china the econometric analysis uses alternative identification schemes to address the potential endogeneity of access to markets we use straight line distances to coastline and navigable river along with the topography of the intervening counties as sources of exogeneous variations we also use identification through heteroskedasticity which does not rely on standard exclusion restrictions the results from alternative identification schemes show that better access to both domestic and international markets has positive effects on per capita consumption the domestic market effect is significantly larger in magnitude and there is complementarity between the access to domestic and international markets

expectation heterogeneity and price sensitivity abstract in many industrialized economies there is sharp contrast between rigid prices in product markets and volatile prices in commodity and asset markets this paper presents an explanation of this phenomenon in the framework of imperfect competition and heterogeneous expectations however the driving force of excessive price sensitivity is different between commodity and asset markets in commodity markets where firms determine quantity and price equates demand to supply seller expectation heterogeneity implies sensitive prices in asset markets with high transaction costs more buyer expectation heterogeneity means more sensitive prices market integration is shown to increase this price sensitivity

realizing the gains from trade export crops marketing costs and poverty this paper explores the role of export costs in the process of poverty reduction in rural africa the authors claim that the marketing costs that emerge when the commercialization of export crops requires intermediaries can lead to lower participation into export cropping and thus to higher poverty they test the model using data from the uganda national household survey the findings show that i farmers living in villages with fewer outlets for sales of agricultural exports are likely to be poorer than farmers residing in marketendowed villages ii market availability leads to increased household participation in export cropping coffee tea cotton fruits and iii households engaged in export cropping are less likely to be poor than subsistence based households the authors conclude that the availability of markets for agricultural export crops helps realize the gains from trade this result uncovers the role of complementary factors that provide market access and reduce marketing costs as key building blocks in the link between the gains from export opportunities and the poor

effectiveness of fertilizer policy reforms to enhance food security in kenya a macro micro simulation analysis food security represents a key challenge in most sub saharan african countries and in kenya in particular where still a relevant share of the population lives below a minimum dietary energy consump

the response of the informal sector to trade liberalization this paper studies the relationship between trade liberalization and informality it is often claimed that increased foreign competition in developing countries leads to an expansion of the informal sector defined as the sector that does not comply with labor market legislation using data from two countries that experienced large trade barrier reductions in the 1980 s and 1990 s brazil and colombia we examine the response of the informal sector to liberalization in brazil we find no evidence of a relationship between trade policy and informality in colombia we do find evidence of such a relationship but only for the period preceding a major labor market reform that increased the flexibility of the colombian labor market these results point to the significance of labor market institutions in assessing the effects of trade policy on the labor market

pro poor trade policy in sub saharan africa abstract this paper examines the presence of a pro poor bias in the existing structure of protection of six sub saharan african ssa countries burkina faso cameroon cote d ivoire ethiopia gambia and madagascar we build on a simple agricultural household production model and we propose an extension to include adjustments in labor income our approach which can be implemented without repeated cross sections of household level data suits well the data constraints in ssa it also allows us to capture the heterogeneity in trade protection at the tariff line level the pro poor bias indicators suggest that ssa s trade policies tend to be biased in favor of poor households as these policies redistribute income from rich to poor households this is because protection increases the agricultural prices of goods that are sold by african households and this effect dominates both the impacts of higher consumption prices and the strong stolper samuelson effects that benefit skilled over unskilled workers

trade liberalization and local labor market adjustment in south africa abstract despite a large literature analyzing trade liberalization in developing countries little evidence exists around its effects in sub saharan african economies characterized by high levels of baseline unemployment and weak manufacturing sectors using a local labor market approach we investigate the causal effects of tariff reforms implemented in south africa between 1994 and 2004 on labor market outcomes at the individual level more specifically we construct a district level measure of exposure to tariff reductions equal to a weighted average of industry tariffs using baseline industry shares as weights and estimate the effect of this shock on local economies we find that workers in districts facing larger tariff reductions experience a significant decline in both formal and informal employment in the tradable sector driven primarily by a decline in manufacturing employment relative to workers in districts less exposed to these reductions there is no evidence of any significant effect on wages for those who remain employed however displaced workers do not show any evidence of transitions into other sectors or migration to less affected regions rather they are more likely to become discouraged workers or exit the labor force entirely and show an increased probability of accessing government transfers

simulating price patterns for tradable green certificates to promote electricity generation from wind abstract this article uses computer simulation to anticipate the price dynamics in a market for tradable green certificates tgcs these markets have been used in europe to promote generation of electricity from renewable resources like wind similar markets have been proposed in the united states of america usa where the certificates are called renewable energy credits recs the certificates are issued to the generating companies for each megawatt hour of renewable electricity generation the companies may sell the certificates in a market and the revenues from certificate sales provide an extra incentive to invest in new generating capacity proponents argue that this market based incentive can be designed to support government mandates for a growing fraction of electricity generation from renewable sources in the usa these mandates are set by the states and are known as renewable portfolio standards rps we simulate the price dynamics of a market designed to support an aggressive mandate for wind generation in the northwestern usa the simulations show that the certificate price climbs rapidly to the cap in the early years after the market opens investors then react to these high prices with construction of new wind capacity after a few years wind generation meets and then exceeds the requirement we show that this pattern appears again and again when the simulations are repeated with wide variations in the estimates of behavioral parameters we use the model to study the impact of different trading strategies by the wind companies and by the distribution companies we also study the simulated market response if the usa adopts the carbon allowance market envisioned in the climate stewardship act the article concludes with recommendations for policy makers involved in tgc market design

trade reform and poverty the case of mexico we use a two step computationally simple procedure to analyse the effects of mexico s s potential unilateral tariff liberalisation on real incomes first we use the cge model provided by the global trade analysis project gtap as the new price generator second we apply the price changes to mexican household data in order to assess the effects of the policy simulation on poverty and income distribution although mexico widely liberalised most of its imports by the mid 90s one salient feature is its membership in the north american free trade agreement nafta with canada and united states by choosing gtap as the price generator we are able to model the differential tariff structure even starting with a low level of tariff protection simulation results show that the impact of tariff reform on welfare will be positive in general for all expenditure deciles we find that when we assume non homothetic individual preferences trade liberalisation benefits people in the poorer deciles more than those in the richer ones

an econometric analysis of emission allowance prices knowledge of the statistical distribution of the prices of emission allowances and their forecastability are crucial in constructing among other things purchasing and risk management strategies in the emissions constrained markets this paper analyzes the two emission permits markets co2 in europe and so2 in the us and investigates a model for dealing with the unique stylized facts of this type of data its effectiveness in terms of model fit and out of sample value at risk forecasting as compared to models commonly used in risk forecasting contexts is demonstrated

non equivalent pass through of anti dumping duties countervailing duties and import tariffs we directly compare the short run pass through of tariffs anti dumping ad duties and countervailing cv duties into us import prices consistent with the theoretical predictions we find clear pattern of non equivalence in import price reaction to the three duty types with the most notable difference detected between ad duties and tariffs according to our estimates a tariff rate would have to be approximately two times higher than an ad duty rate in order to have the same effect on the delivered import price

rational expectations and price rigidity in a monopolistically competitive market this paper analyses monopolistically competitive markets under incomplete information facing unanticipated disturbances firms determine their prices before they have information about other firms prices and form their expectations about the average price rationally if the market becomes very competitive in the sense that the price elasticity of individual demand is close to infinity then the average price is completely insensitive to short run unanticipated disturbances in the intermediate case if a cost disturbances are uniform and b demand and cost disturbances are correlated then the average price is sensitive to cost and insensitive to demand

food prices wages and welfare in rural india this paper considers the welfare and distributional consequences of higher relative food prices in rural india through the lens of a specific factors general equilibrium trade model applied at the district level the evidence shows that nominal wages for manual labor both within and outside agriculture respond elastically to increases in producer prices that is wages rose faster in rural districts growing more of those crops with large price run ups over 2004 09 accounting for such wage gains the analysis finds that rural households across the income spectrum benefit from higher agricultural commodity prices indeed rural wage adjustment appears to play a much greater role in protecting the welfare of the poor than the public distribution system india s giant food rationing scheme moreover policies like agricultural export bans which insulate producers as well as consumers from international price increases are particularly harmful to the poor of rural india conventional welfare analyses that assume fixed wages and focus on households net sales position lead to radically different conclusions

price and output responsiveness to nominal changes under differential information abstract the paper considers how changes in nominal income are transmitted into price and output changes within a setting where the traditional assumption of instantaneous market clearing costless coordination is given up in favour of a more realistic setting where price decisions are made by numerous agents firms acting independently on their private decentralized information the responsiveness of firm specific prices is considered and it is shown how absolute or nominal price rigidity can be explained building this into a theory of the general price level it is proved that heterogenously perceived nominal changes affect the price level less than proportionally moreover it is shown how a phillips curve relation between inflation and output can be rationalized within the model finally the issue of relative price variability is considered and related to misallocation of economic resources under differential information

price drivers and structural breaks in european carbon prices 2005 2007 this article aims at characterizing the daily price fundamentals of european union allowances euas traded since 2005 as part of the emissions trading scheme ets the presence of two structural changes on april 2006 following the disclosure of 2005 verified emissions and on october 2006 following the european commission announcement of stricter phase ii allocation allows to isolate distinct fundamentals evolving overtime the results extend previous literature by showing that eua spot prices react not only to energy prices with forecast errors but also to unanticipated temperatures changes during colder events besides the sub period decomposition of the pilot phase gives a better grasp of institutional and market events that drive allowance price changes

a prism into the ppp puzzles the micro foundations of big mac real exchange rates we match big mac prices with prices of its ingredients as a unique prism to study real exchange rates rers this approach has several advantages first the levels of the big mac rer can be measured meaningfully second as the exact composition of a big mac is known the contributions of its tradable and non tradable components can be estimated relatively precisely third the dynamics of the rer can be studied in a setting free of several biases inherent in cpi based rers finally a large cross country dimension allows us to overturn the engel result on what drives rers in most economies the exchange rate is the single most important relative price one that potentially feeds back into a large range of transactions obstfeld and rogoff 2000

using survey data to assess the distributional effects of trade policy the author develops and applies a methodology to empirically explore the effects of trade policies on the distribution of income and poverty in developing countries he uses a methodology based on two links one connecting trade policies to prices and another connecting prices to household welfare the author applies the methodology to the study of the distributional effects of mercosur on argentine families the main finding is that mercosur benefits the average argentine household across the entire income distribution there is evidence of a pro poor bias of the regional trade agreement on average poor households gain more from the reform than middle income households whereas the effects on rich families are positive but not statistically significant prior to the reform argentine trade policy protected the rich over the poor and after the reform granted some protection to the poor as relative pre mercosur tariffs are higher on relatively skill intensive goods the tariff removals tend to benefit the poor over the rich these findings indicate that trade reforms may actually help improve the distribution of income and reduce poverty in the country

tariff pass through and the distributional effects of trade liberalization abstract this paper estimates the distribution of welfare gains due to the trade reforms in india by simultaneously considering the effect on prices of tradable goods and wages the cost of consumption for each household is affected by the domestic price changes while wage incomes adjust to these price changes in equilibrium three rounds of the indian employment and consumption surveys are used for the analysis the price transmission mechanisms are estimated for both rural and urban areas to understand the extent to which the trade reforms are able to affect the domestic prices in order to assess the distributional effects a series of nonparametric local linear regressions are estimated the findings show that households at all per capita expenditure levels had experienced gains as a result of the trade liberalization while the average effect was generally pro poor and varied significantly across the per capita expenditure spectrum

household impacts of tariffs data and results from agricultural trade protection how do trade reforms impact households in different parts of the income distribution this paper presents a new database the household impacts of tariffs data set which contains harmonized household survey and tariff data for 54 low and lower middle income countries the data cover highly disaggregated information on household budget and income shares for 53 agricultural products wage labor income nonfarm enterprise sales and transfers as well as spending on manufacturing and services using a stylized model of the first order impacts of import tariffs on household real income this paper quantifies the welfare implications of agricultural trade protection on average unilateral elimination of agricultural tariffs would increase household incomes by 2 50 percentage points import tariffs have highly heterogeneous effects across countries and within countries across households consumers and income earners the average standard deviation of the gains from trade within a country is 1 01 percentage points

pros and cons of exposing renewables to electricity market risks a comparison of the market integration approaches in germany spain and the uk abstract the article examines how renewable electricity res e producers are integrated into the electricity market under the support legislations and regulatory frameworks of germany spain and the uk focus is on wind power which faces the highest market integration challenge of all res e the analysis shows that the three countries follow contrasting approaches of exposing res e producers to the market risks of forward electricity markets balancing markets and system planning requirements risk exposure is highest in the uk and lowest in germany from a policy maker s perspective there is a trade off between a high risk and a low risk approach when res e face high market risks a higher level of financial support is required to stimulate res e development than in a low risk environment but the exposure to market risks may also give an incentive to make efficient use of the respective market thus limiting the indirect costs to society the special characteristics of wind energy however put natural limits to the response of wind power plants to market prices and locational price signals and will increasingly influence electricity markets and grid infrastructure these interdependencies should be recognised in the design of res e policies and market regulations

the effect of peru s cdm investments on households welfare an econometric approach abstract the clean development mechanism cdm under the kyoto protocol has two main objectives reducing emissions of greenhouse gases ghgs and contributing to sustainable development sd in developing countries the empirical evidence indicates that the first goal has been fulfilled however the literature mostly provides ex ante evidence regarding the second goal this paper contributes to the literature by assessing the ex post quantitative effect that cdm projects have had on sd employment and monetary welfare in peru a country ranked among the most important cdm investment host countries worldwide the econometric model estimates the direct and indirect effects of the cdm projects investments on peruvian households monetary welfare for 2011 2015 our results suggest that cdm investments had a slight effect on household consumption expenditure and had no effect neither on employment nor in poverty alleviation our findings suggest the need to strengthen cdm s institutional framework by identifying key development definitions and indicators

analysing the impact of price shocks in rural economies do household responses matter abstractwe analyse the impact of higher food prices on rural households in tanzania focusing on the often neglected role of households behavioural responses we introduce a new framework which considers the production response jointly with substitution effects in consumption and takes into account households market participation choices taking into account behavioural responses on consumption and production can significantly alter the sign and magnitude of the welfare impact in the long run

goods prices and exchange rates what have we learned import prices typically change by a smaller proportion than the exchange rate between the exporting and importing country recent research indicates that common currency relative prices for similar goods exported to different markets are highly correlated with exchange rates between those markets this evidence suggests that incomplete pass through is a consequence of third degree price discrimination while distance matters for market segmentation borders have independent effects the source of the border effect has not been clearly identified furthermore there is little evidence yet to suggest substantial market power is implied by the observed price discrimination

the role of regulatory uncertainty in certificate markets a case study of the swedish norwegian market abstract price volatility in green certificate markets reflects uncertainty over future prices representing a major source of risk for renewable energy generators price risk is considered the principal deficiency of this market based policy since it causes investors to require higher returns moreover investors are exposed to regulatory risk namely the risk that a change in the regulation will materially impact the certificate price regulatory uncertainty is reflected in market volatility exacerbating certificate price risk using an econometric approach we investigate the role of regulatory changes on price volatility in the swedish certificate market the results of our analysis indicate that regulatory changes strongly affect certificate markets resulting in periods of higher volatility moreover we analyze whether certificate price volatility has changed after creating a joint swedish norwegian market results indicate that the ambivalence surrounding the creation of this bigger market led to a period of increased price volatility between 2010 and 2011 overall this article brings a better understanding of the role of regulatory uncertainty on certificate markets and gives evidence for its negative impact in terms of increased price volatility

poverty impacts of changes in the international prices of agricultural commodities recent evidence for argentina an ex ante analysis abstractargentina has benefited greatly from the increase in prices of agricultural commodities with a large share of its population with low and medium low incomes however a sizable part of households is likely to be adversely affected by the accompanying rise in the price of the consumption basket an ex ante analysis suggests that this is the case changes through a less obvious channel that is in factor incomes are likely to be more beneficial to middle income households in general all households experience losses with poorer households being the most affected when accounting for transfers financed through the collection of export taxes poorer households benefit in the absence of compensatory measures increases in the prices of agricultural commodities could potentially have an important impact in terms of indigence and poverty

the price effect of tariff liberalization measuring the impact on household welfare abstract trade policy literature has for many years emphasized open policies positive impact on economic growth and development while these results generally hold when measured on averages empirical evidence suggests that trade liberalization is unlikely to produce beneficial results across all households this study adds to the literature by providing an analysis of the distributive effects of tariff liberalization in mexico the paper examines the effect of tariff liberalization from the perspective of households both as consumers and factor owners allowing for imperfect domestic price transmission the results indicate the overall positive effect of tariff liberalization masks significant differences in the distribution of gains both across income levels and across geographic regions richer households are found to have gained relatively more urban areas as well as mexican states closest to the united states border are also found to be larger beneficiaries while southernmost states have been largely bypassed by the effects of tariff liberalization those results can be explained not only in relation to the different endowments of the households but also by the diverse effects on local prices that has resulted from mexican trade liberalization

distributive effects of regional trade agreements on the small trading partners mercosur and the case of uruguay and paraguay abstract it is disputed whether trade liberalisation processes are sufficient for reducing poverty and inequality we explore how gains from trade have been distributed in the two minor trade partners of mercosur uruguay and paraguay by analysing the impact of trade liberalisation on poverty and inequality through two main transmission channels prices and income in the case of uruguay trade liberalisation favoured a reduction in poverty indicators but had an almost zero effect on income inequality in the case of paraguay trade liberalisation had a markedly negative impact in terms of poverty yet income distribution improved we conclude that in the case of mercosur the effect of trade on poverty and income inequality varies per country and per region in particular we conclude that trade integration policies cannot be regarded as poverty alleviating per se

the imperfections of a credit market in agriculture in the article the relations of the credit market with the agricultural sector were evaluated the significance of the imperfections in the allocation of resources with help of the credit market was presented the attention was paid to both the specificity of the very agriculture and the external conditions which were created as a result of the process of globalization the effects of the impact of the selected macroeconomic indicators on the adjustments within the interest rate calculated with use of the changes of the prices of agricultural products were examined ten highly developed countries were analyzed for regard of the similar conditions of functioning the research period referred to 1990 2010 the conducted deliberations allowed to distinguish a group of factors influencing the terms of creating the costs of obtaining the credit money the character of the existing correlations was analyzed the different meaning of particular relations was proved the presented results raise the significance of retransfers dedicated to agriculture with help of the state

the development trinity how regional integration impacts growth inequality and poverty developing countries today have become more active participants in regional trade agreements this raises questions about how the benefits of integration are distributed and the extent to which lower income countries are able to capture development gains historically such impacts have been difficult to identify with precision this paper seeks to address this gap by empirically analysing the impact of regional integration on development particularly the effects on growth and welfare using both bilateral and regional integration measures we show that the ability to capture gains from integration varies across developing country regional groups with developing asia benefiting on par with developed countries the findings in the paper indicate that trade and trade policy play an important role in reducing inequality and poverty in developing countries it also shows that regionalism can function as a channel to make multilateralism a more adept way of addressing national challenges