Research Activities
Research Projects 2023
The Distributional Effects of Trade and Consumption Heterogeneity
Outline
This research project examines a question of how households’ consumption patterns affect the distributional effects of trade. Some households tend to benefit from trade liberalization by spending more on imported manufactures, intermediate inputs, and consumption goods. If poorer households have a larger spending share on imported goods, trade liberalization should reduce inequality of their purchasing power. In this respect, consumption heterogeneity in imported goods can play a substantial role in the distributional effects of trade. For an empirical investigation, we exploit diary data in Cambodian Socio-Economic Surveys (CSES) that record detailed expenditure items and their origins (i.e., household production, domestically produced goods, and imported goods). The diary data record not only agricultural and manufactured goods, but services such as haircuts, education fees, and transportation. This dataset allows us to estimate the impact of import tariffs on households across spending shares of imported goods. Based on the estimate of tariff-passthrough effects, we quantify the contribution of the two forces in the impact of import tariffs on inequality; i.e. poorer households may spend relatively more on tradable sectors (food, manufactured goods), but spend less on imported goods within the tradable sector.
Period
April 2023 - March 2025
Members
| Role | Member |
|---|---|
| [ Organizer ] | Tanaka, Kiyoyasu |
| [ Co-researcher ] | Mi Dai(Beijing Normal University Professor) |
*Affiliations are as of April 2023.
Expected Outcome
- Paper Submission to Peer-Reviewed Journal