Tariff-based product-level Trade Elasticity

Lionel Fontagné, Houssein Guimbard and Gianluca Orefice

forthcoming at Journal of International Economics

Product-Level Trade Elasticity

Trade elasticity which varies widely across products is a crucial parameter in evaluating the welfare impacts of changes in trade frictions. We estimate trade elasticities at the product level by exploiting the variation in bilateral tariffs for each product category for the universe of country pairs over the 2001 to 2016 period. The predicted trade flows using the product-specific trade elasticities estimated here match the observed post-EPA import between the US and Chile, confirming the accuracy of our estimates.

JIE accepted version [download]

CEPII working paper version [download]

Dataset HS 6-digit classification [download] UPDATED version Sept 2021

Dataset HS 4-digit classification [download] UPDATED version Nov 2021

Dataset TiVA classification [download] UPDATED version Oct 2021

Dataset GTAP (rev 10) classification [download] UPDATED version Nov 2021 (based on the updated HS GTAP rev 10 available below )

Additional resources:

Trade elasticity to distance and shipping cost elasticity to distance dataset (only 1% significant elasticities) here

Repository Folder with SAS dofiles here

Repository Folder with STATA dofiles here

Estimations results (tariff coefficient and standard errors) version Nov 2021 here

Bilateral Trade Data BACI (CEPII) here

Applied bilateral tariff MacMap (CEPII) here

HS rev 2007 - GTAP rev 10 conversion table here

Related paper:

Fontagné, L., Martin, P. and G. Orefice (2018) "The international elasticity puzzle is worse than you think", Journal of International Economics 115: 115-129.

  • Highlight: using a firm level electricity price as an instrumental variable for export prices, we estimate average firm-level trade elasticity to export price equal to -5.17

  • More details [here]

  • Download Paper [here]