Agricultural Trade Liberalization, Productivity Gain, and Poverty Alleviation: A General Equilibrium Analysis
Nadia Belhaj Hassine Sr.
affiliation not provided to SSRN
Laval University - Département d'Économique
October 4, 2010
MPIA Working Paper 2010-09
Computable General Equilibrium (CGE) models have gained continuously in popularity as an empirical tool for assessing the impact of trade liberalization on agricultural growth, poverty, and income distribution. However, conventional models ignore the channels linking technical change in agriculture, trade openness, and poverty. This study seeks to incorporate econometric evidence of these linkages into a CGE model to estimate the impact of alternative trade liberalization scenarios on poverty and equity.
The analysis uses the Latent Class Stochastic Frontier Model (LCSFM) and the metafrontier function to investigate the influence of trade openness on agricultural technological change. The estimated productivity effects induced from higher levels of trade are combined with a general equilibrium analysis of trade liberalization to evaluate the income and price changes. These effects are then used to infer the impact on poverty and inequality following the top-down approach. The model is applied to Tunisian data using the social accounting matrix of 2001 and the 2000 household expenditures surveys. Poverty is found to decline under agricultural and full trade liberalization and this decline is much more pronounced when the productivity effects are included.
Number of Pages in PDF File: 52
Keywords: Openness, Agriculture, Productivity, Poverty, CGE modeling
JEL Classification: C24, C33, D24, F43, I32, Q17working papers series
Date posted: October 10, 2010
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