Anderson: Boston College. Chestnut Hill, MA 02167. Tel: 617-552-3691, Fax: 552-2308. Research for this paper was supported by the Research Committee of the World Bank. the usual disclaimer applies.
Article first published online: 27 OCT 2006
Review of International Economics
Volume 3, Issue 2, pages 156–173, June 1995
How to Cite
Anderson, J. E. (1995), Tariff-Index Theory. Review of International Economics, 3: 156–173. doi: 10.1111/j.1467-9396.1995.tb00060.x
- Issue published online: 27 OCT 2006
- Article first published online: 27 OCT 2006
Tariff indices such as trade-weighted means, variances, and coefficients of variation are commonly used despite their lack of a theoretical foundation. This paper provides a theoretical framework for the index-number problem for tariffs. This paper shows that the Anderson and Neary (1993) trade-restrictiveness index is a function of “marginal trade-weighted moments” of the tariff schedule, higher mean and generalized variance both implying a higher TRI. In the CES case, the TRI is increasing in the trade-weighted mean and in the variance of the tariff schedule. For this special case the mean and the variance are partially legitimized.