A Tale of Pork Prices: Evasion and Attenuation of a Japanese Tariff
Crawford School Research Paper
Asia Pacific Economic Paper No. 382
35 Pages Posted: 2 Aug 2011
There are 2 versions of this paper
A Tale of Pork Prices: Evasion and Attenuation of a Japanese Tariff
Date Written: 2009
Abstract
This paper empirically examines the effectiveness of a safeguard tariff in the Japanese market for imported pork parts. The goals are, first, to consider a refinement to the traditional market-based method for evasion detection, and, second, to apply the method in a setting where evasion is suspected to be widespread. Utilising a within-pig variation in tariff burdens and the timing of safeguard invocations, I examine a panel of monthly wholesale prices on narrowly-defined pork products from 2001 through 2008. The results are consistent with a hypothesis that a widespread evasion nullified the safeguard tariff on pork, and are robust to a range of alternative explanations including the adjustment of profit margins by traders. Safeguard tariffs appear to be a simple mechanism, but behavioural responses can undo the policy intent.
Keywords: safeguard tariff, price disparity, tax incidence
JEL Classification: H26, H22, F13, L11, Q17
Suggested Citation: Suggested Citation
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