Abstract
This paper examines the optimal tariff policy for an importer of a quality-differentiated product when tariff levels are allowed to vary with the quality of the good. The deadweight loss due to changes in the matching of consumers to goods under tariffs is emphasized. It is shown that if the objective is to transfer income to products, there is a presumption that the optimal policy will require consumers to choose lower quality goods than under free trade (quality downgrading). If all qualities are improved, an ad valorem tariff cannot be the optimal policy.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
