Journal Article

Assessing the Price-Raising Effect of Non-Tariff Measures in Africa

Olivier Cadot and Julien Gourdon

in Journal of African Economies

Volume 23, issue 4, pages 425-463
Published in print August 2014 | ISSN: 0963-8024
Published online June 2014 | e-ISSN: 1464-3723 | DOI: https://dx.doi.org/10.1093/jae/eju007
Assessing the Price-Raising Effect of Non-Tariff Measures in Africa

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In spite of widespread tariff reductions, intra-African borders remain ‘thick’. Regional trade is inhibited by inadequate transportation infrastructure but also by various non-tariff measures (NTMs). This paper combines price data from the World Bank's International Comparison Project with a new database on NTMs to estimate their effect on consumer prices for selected consumption products. Results based on panel regressions on 1,260 country-product pairs suggest that, after controlling for tariffs, systematic cross-country cost-of-living differences, and product-specific unobservables, sanitary and phytosanitary measures contribute to raise the price of African foodstuffs by 14%. At the product level, rice and other cereals, some types of meat (e.g. poultry) and edible oils tend to fetch high ad-valorem equivalents. Combining our estimates with data on household expenditure patterns from Kenya's household survey, we show that the effect is regressive, raising the cost of living by 9% for poor households.

Keywords: F13; F15

Journal Article.  10799 words.  Illustrated.

Subjects: International Trade

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