Modeling Distribution Services and Assessing Their Welfare Effects in a General Equilibrium Framework

16 Pages Posted: 8 May 2006

See all articles by Scott C. Bradford

Scott C. Bradford

Brigham Young University - Department of Economics

Alexandre Gohin

French National Institute for Agricultural Research (INRA)

Abstract

Most international trade models fail to account for the fact that almost all goods must pass through the distribution sector. The authors compare different approaches to modeling distribution within an Applied General Equilibrium framework and find that such modeling may significantly affect trade opening simulations. They also predict large potential gains from streamlining distribution. For instance, a 10% reduction in Japan's final goods distribution margins would benefit it as much as worldwide free trade would. They also find that, compared to trade opening, reducing margins leads to smaller inter-sectoral production shifts and thus may engender less political opposition.

Suggested Citation

Bradford, Scott C. and Gohin, Alexandre, Modeling Distribution Services and Assessing Their Welfare Effects in a General Equilibrium Framework. Review of Development Economics, Vol. 10, No. 1, pp. 87-102, February 2006, Available at SSRN: https://ssrn.com/abstract=875919 or http://dx.doi.org/10.1111/j.1467-9361.2005.00302.x

Scott C. Bradford (Contact Author)

Brigham Young University - Department of Economics

130 Faculty Office Bldg.
Provo, UT 84602-2363
United States

Alexandre Gohin

French National Institute for Agricultural Research (INRA) ( email )

147, rue de l'Universite
Paris Cedex 07, 78-Yvelines 75338
France

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