Abstract
AbstractWe explore how different data aggregation levels affect the gravity estimates of non‐tariff barriers (NTBs) in the agro‐food sector, and we examine their related impacts on policy simulations of an expansion to the European Union (EU) that would include Turkey. We calculate two sets of ad valorem equivalents (AVEs) ofNTBs using the gravity approach to disaggregated and aggregated Central Product Classification data for 15 Global Trade Analysis Project (GTAP) agro‐food sectors. We find that theAVEs ofNTBs vary substantially across products and that using aggregated data primarily results in greater effects ofNTBs. In a second step, we incorporate theAVEs ofNTBs into theGTAPmodel to evaluate Turkey'sEUmembership and conclude that aggregation bias has considerable effects on both the estimation ofNTBs and the general equilibrium simulation results. Utilising different data aggregation levels leads to a great variability of trade costs ofNTBs and, hence, to misleading trade and welfare effects.
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