A gravity model to account for vertical linkages between markets with an application to the cattle/beef sector |
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| Authors: | Pascal L. Ghazalian Lota D. Tamini Bruno Larue Jean-Philippe Gervais |
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| Affiliation: | 1. Department of Economics , University of Lethbridge , Lethbridge , Alberta , Canada pascal.ghazalian@uleth.ca;3. Department of Agri-Food Economics and Consumer Sciences and CREA , Laval University , Quebec City , Quebec , Canada;4. Department of Agricultural and Resource Economics , North Carolina State University , Raleigh , North Carolina , USA |
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| Abstract: | A gravity model is developed to explain bilateral trade flows in primary and processed commodities within the same agri-food supply chain. It accounts for vertical production linkages, trade and domestic policies, and supply rigidities at the farm level. Our application focuses on cattle/beef trade flows between 42 countries. The estimated parameters of the model are used to simulate trade flows. We found large differences in the impacts of the full and partial liberalization scenarios. A parametric bootstrap procedure is used to generate confidence intervals around predicted trade liberalization outcomes. |
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| Keywords: | gravity model tariffs trade barriers trade liberalization |
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