# **Table 4: Impacts of Intermediate Modeling Structure with Four-sectors with a Global Ten Percent Reduction in Iceberg Trade Costs*** <u>Results are Hicksian Equivalent Variation as a Percent of Consumption</u>

|||1|2|**3**|**4**|**5**|**6**|**7**|**8**|**9**|
|---|---|---|---|---|---|---|---|---|---|---|
||domestic<br>trade|**Cobb-D**<br>**Single Com**|**ouglas De**<br> **posite Int**|**mand**<br>**ermediate**|**Cobb-Do**<br>**Interme**<br>|**uglas Dema**<br>**diates; rea**|**nd for**<br>**l data**|**Elastici**<br>**Intermed**|**ty of Subst**<br>**iates = 0.5**|**ition for**<br>**; real data**|
||share|**Armington**|**Krugman**|**Melitz**|**Armington**|**Krugman**|**Melitz**|**Armington**|**Krugman**|**Melitz**|
|**Region**|_rr_<br>|σ(D,M)= 5.86*|σ = 5.59*|σ=5.0;a=4.58*|σ(D,M)= 6.13*|σ = 5.65*σ|=5.0;a=4.58|σ(D,M)= 5.96*|σ = 5.61*|σ=5.0;a=4.58*|
|Australia-New Zealand|89.3%|3.5%|3.7%|3.7%|3.6%|3.71%|3.66%|3.6%|2.9%|2.8%|
|Canada|84.4%|4.3%|5.3%|5.5%|4.2%|6.3%|6.9%|4.2%|4.5%|4.6%|
|China|91.1%|3.6%|7.8%|9.1%|3.5%|9.7%|12.5%|3.4%|4.9%|5.2%|
|Japan|91.6%|2.1%|3.4%|3.6%|2.1%|4.3%|4.9%|2.0%|2.8%|3.0%|
|Mexico-Chile-Peru|82.9%|4.8%|6.0%|6.2%|4.9%|6.4%|6.8%|4.8%|5.0%|5.0%|
|Low Income NEC|76.9%|6.3%|6.2%|6.1%|6.5%|5.8%|5.5%|6.5%|4.7%|4.4%|
|Middle Income NEC|88.3%|3.6%|3.8%|3.9%|3.7%|3.7%|3.6%|3.6%|2.9%|2.7%|
|OECD NEC|91.4%|2.3%|3.3%|3.6%|2.3%|3.8%|4.2%|2.3%|2.7%|2.7%|
|Philippines|79.2%|4.7%|6.5%|6.8%|4.8%|7.2%|7.8%|4.7%|5.3%|5.4%|
|United States|90.6%|1.9%|2.4%|2.5%|1.9%|2.8%|3.0%|1.9%|2.0%|2.1%|
|average for the World|90.0%|2.77%|3.83%|4.09%|2.80%|4.34%|4.83%|2.75%|2.93%|2.96%|

*All scenarios with four IRTS sectors and trade imbalances included; but single primary factor and zero tariffs. Source: Authors’ calculations.

# **<u>Table 4a: --the Feenstra ratio and Proportional Changes in the Terms-of-trade*</u>**

||1<br><br>|**2**<br>**Cobb-Do**<br>**Single Com**<br>|**3**<br>**uglas Inter**<br>**posite Int**<br>|**4**<br>**mediate**<br>**ermediate**<br>|**5**<br>|**7**<br><br>**Cobb-**|**8**<br>**Douglas D**<br>|**9**<br>**emand for**<br>**real data**<br>|**10**<br>**Intermed**<br>|**11**<br>**iates**<br>|**12**<br><br>**Elasticit**|**13**<br>**y of Substi**<br>|**14**<br>**tion for In**<br>**real data**<br>|**15**<br><br>**termediat**|**16**<br><br>**es = 0.5**|
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
||**Armington**|**Krug**|**man**|**Me**|**litz**|**Armington**|**Krug**|**man**|**M**|**elitz**|**Armington**|**Krug**|**man**|**M**|**elitz**|
|**Region**|**TOT**|**TOT**|**Feenstra**|**TOT**|**Feenstra**|**TOT**|**TOT**|**Feenstra**|**TOT**|**Feenstra**|**TOT**|**TOT**|**Feenstra**|**TOT**|**Feenstra**|
|Australia-New Zealand|1.0186|1.0110|1.0160|1.0112|1.0157|1.0209|1.0129|1.0159|1.0134|1.0139|1.0220|1.0113|1.0134|1.0112|1.0119|
|Canada|1.0103|1.0117|1.0251|1.0116|1.0272|1.0091|1.0199|1.0290|1.0207|1.0366|1.0108|1.0160|1.0236|1.0160|1.0270|
|China|0.9940|1.0020|1.0242|1.0024|1.0307|0.9928|1.0025|1.0303|1.0036|1.0424|0.9925|1.0000|1.0195|1.0000|1.0229|
|Japan|0.9927|0.9984|1.0166|0.9981|1.0188|0.9897|0.9991|1.0209|0.9986|1.0265|0.9892|0.9990|1.0160|0.9989|1.0191|
|Mexico-Chile-Peru|1.0117|1.0122|1.0279|1.0120|1.0302|1.0120|1.0126|1.0304|1.0123|1.0329|1.0129|1.0120|1.0256|1.0117|1.0266|
|Low Income NEC|1.0141|1.0089|1.0297|1.0090|1.0297|1.0163|1.0092|1.0275|1.0092|1.0255|1.0181|1.0081|1.0240|1.0078|1.0230|
|Middle Income NEC|1.0125|1.0047|1.0179|1.0046|1.0163|1.0144|1.0030|1.0176|1.0025|1.0134|1.0149|1.0039|1.0147|1.0037|1.0116|
|OECD NEC|0.9937|0.9967|1.0159|0.9967|1.0172|0.9931|0.9968|1.0181|0.9968|1.0204|0.9925|0.9976|1.0143|0.9978|1.0155|
|Philippines|0.9971|1.0049|1.0342|1.0049|1.0382|0.9973|1.0056|1.0372|1.0056|1.0424|0.9982|1.0046|1.0309|1.0047|1.0339|
|United States|0.9871|0.9865|1.0151|0.9867|1.0148|0.9869|0.9865|1.0172|0.9866|1.0174|0.9866|0.9875|1.0141|0.9879|1.0140|
|average for the World||||||||||||||||

*See section 5 for a definition of these parameters. In the Armington model, the Feenstra ration = 1 in all cases.

## **Source: Authors estimates**

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