Uniform Tariff Research Articles

Modelling features and outcomes of Brazil's electricity tariff flag program

Brazil's Tariff Flag Program is presented with its main modelling features and outcomes explored. The program's virtue is coupling several independent procurement commitments in a single target cash flow linked to an information framework, which seeks to provide real-time awareness about the power system's production costs. Regulatory principles such as simplicity and stability challenge the modelling approach. The framework may be useful for non- or partially liberalised power markets, where uniform tariff rates are common. It also may help utilities to deal with wholesale prices' volatilities.

Strategic trade policy in general oligopolistic equilibrium: The case of import tariffs

In a two-country model of general oligopolistic equilibrium with technologically heterogeneous sectors, I study how, in a home-market scenario, a unilateral rise in uniform cross-sector import tariffs affects wages, countrywide profits, and welfare. Firms face resource constraints and wages are simultaneously determined. Economy-wide protectionism reduces the foreign wage without affecting the domestic one. Domestic countrywide profits benefit from a small rise in uniform tariffs, whereas the foreign counterpart is damaged. Domestic welfare is unambiguously hindered. Hence, the general-equilibrium cross-sector perspective goes against the textbook version theory of the optimal tariff in partial equilibrium. Rationalization of these effects suggests a political-economy view on tariff formation in general equilibrium. Then I extend the model to segmented markets, considering uniform specific and ad valorem tariffs for bilateral and unilateral trade policies.

A second-best argument for low optimal tariffs on intermediate inputs

We derive a new formula for the optimal uniform tariff in a small-country, heterogeneous-firm model with roundabout production and a nontraded good. Tariffs are applied on imported intermediate inputs. First-best policy requires that markups on domestic intermediate inputs are offset by subsidies. In a second-best setting where such subsidies are not used, roundabout production and the monopoly distortion in the traded sector create strong incentives to lower the optimal tariff on imported inputs. In a quantitative version of our two-sector small open economy, we find that the optimal tariff is lowered under nearly all parameter values considered, and can be negative.

Uniform versus discriminatory tariffs when competition mode is endogenous

AbstractWe examine the welfare implications of two tariff regimes when firms have a forward‐looking view on trade policy. Discriminatory tariffs lead to Cournot competition, whereas uniform tariffs lead to diverse competition modes. If exporters are identical in production costs, all the trading countries are better off under the uniform rather than discriminatory tariff regime, which suggests a possibility that countries reach an agreement on the most‐favored nation (MFN) as a preferred tariff regime. For asymmetric costs among exporters; however, the competition mode determined endogenously under the uniform tariffs does matter for the welfare comparison. If Cournot competition emerges, then each country's preference is consistent with conventional wisdom. That is, the importing country and high‐cost exporters prefer a discriminatory tariff while low‐cost exporters have a uniform tariff regime. However, if the uniform regime leads to either Bertrand or asymmetric competition mode, then the cost gap between exporters would be the determinant factor. Only when the cost gap is sufficiently small, the uniform tariff, required by the MFN clause of the World Trade Organization, can be beneficial to all trading countries.

Tariff discrimination for co-existence of domestic and foreign firms with increasing marginal costs

When foreign exporters and domestic firms are allowed to produce under asymmetrically increasing marginal costs, the high-cost exporter is handicapped, whereas the low-cost exporter is subsidized in a discriminatory tariff regime. Thus, the profit of the high-cost (low-cost) exporter is smaller (larger) under discriminatory tariffs than under uniform ones. Regardless of the domestic firm type, total output, consumer surplus, low-cost exporter profits, and social and global welfare are always greater under discriminatory tariffs than under uniform ones. Even when exporters and low- and high-cost domestic firms coexist, our main results hold, while both types of domestic firm prefer uniform tariffs to discriminatory ones.

Uniform versus discriminatory tariffs in increasing marginal costs and endogenous competition

By allowing exporters to produce under asymmetric increasing marginal costs, we investigate the impact of tariff discrimination when considering exporters' endogenous choice of competition mode. When considering endogenous competition mode, discriminatory tariffs lead to Cournot competition, whereas uniform tariffs lead to diverse modes of competition. The discriminatory (uniform) tariffs can obtain Pareto superiority from the perspective of consumers surplus, social and global welfare if product differentiation is either high or low (intermediate). Contrast to previous results, since the importing country tends to impose a lower (higher) tariff on the efficient (inefficient) exporter, the inefficient exporter always prefers the uniform tariffs while the efficient exporter's preference for tariff regime varies for any degree of product differentiation. Thus, with increasing marginal costs for any degree of product differentiation, there is a possibility that the preferences for tariff regimes change in the same direction for the exporters' profits, consumers surplus, social and global welfare.

Optimal tariffs with endogenous vertical structure: Uniform versus discriminatory tariffs

Using the export-rivalry model, we examine the welfare impact of two tariff regimes when firms’ vertical structure is endogenously determined via the strategic behavior of each firm. First, with discriminatory tariffs, if the degree of imperfect substitutability is sufficiently low, the rent-shifting effects of vertical separation becomes less important and firms chooses vertical integration to enjoy lower tariffs, and vice versa if the degree of imperfect substitutability is sufficiently high. However, an asymmetrical vertical structure, i.e., low (high)-cost firm chooses vertical separation (integration), emerges only in the uniform tariffs. Thus, the existence of firms’ diverse vertical structure between tariff systems can arise. Second, although firms are better off if they choose vertical separation, each firm chooses vertical integration in the discriminatory tariffs (i.e., prisoners’ dilemma). Third, if firms choose vertical integration in the discriminatory tariffs but vertical separation in the uniform ones, they prefer the uniform tariffs as far as cost differential between firms is not large; and the global welfare is greater in the discriminatory than in the uniform tariffs.

Sequential tariffs with increasing marginal costs

AbstractThis study examines the superiority of the discriminatory and uniform tariff regimes under both simultaneous and sequential arrangements in terms of social and global welfare by considering asymmetrically increasing marginal costs among exporters. Under Cournot competition, the importing country has an incentive to manipulate the tariff structure using a sequential tariff arrangement, which implies that it prefers to impose tariff on a low‐cost exporter first and a high‐cost exporter later. Sequential discriminatory (uniform) tariffs can achieve Pareto superiority from the perspective of consumer surplus, and social and global welfare if product differentiation is low (high). It is mainly because high‐cost (low‐cost) exporters are handicapped (subsidized) under alternative tariff regimes. In contrast to previous research, our analysis suggests the possibility that preferences for tariff regimes will change in the same direction for consumer surplus, social welfare, and global welfare.

Analisis Hukum Ekonomi Islam Terhadap Penetapan Fee Transaksi BRILink

<p>BRILink agent is an officeless banking service expansion initiated by BANK BRI. The presence of BRILink agents really helps the community to take advantage of banking services as needed. In addition, BANK BRI also invites its customers to become BRILink agents, so that they can serve banking transactions to the public, just like coming to a bank or ATM machine. The convenience offered by BRILink to the public raises a separate problem in setting tariffs at the agent level, where BRILink agents have uniform tariffs for their customer transactions. The research tries to reveal the reasons for the difference in tariffs in transactions in each BRILink agent in the Repaking Village, Wonosamodro District, Boyolali Regency and reviews how the fee scheme is in the concept of Islamic Law.</p>

Use of algorithms for identifying patients in a German claims database: learnings from a lung cancer case

BackgroundThe analysis of statutory health insurance (SHI) data is a little-used approach for understanding treatment and care as well as resource use of lung cancer (LC) patients in Germany. The aims of this observational, retrospective, longitudinal analysis of structured data were to analyze the healthcare situation of LC patients in Germany based on routine data from SHI funds, to develop an algorithm that sheds light on LC types (non-small cell / NSCLC vs. small cell / SCLC), and to gain new knowledge to improve needs-based care.MethodsAnonymized billing data of approximately four million people with SHI were analyzed regarding ICD-10 (German modification), documented medical interventions based on the outpatient SHI Uniform Assessment Standard Tariff (EBM) or the inpatient Operations and Procedure Code (OPS), and the dispensing of prescription drugs to outpatients (ATC classification). The study included patients who were members of 64 SHI funds between Jan-1st, 2015 and Dec-31st, 2016 and who received the initial diagnosis of LC in 2015 and 2016.ResultsThe analysis shows that neither the cancer type nor the cancer stage can be unambiguously described by the ICD-10 coding. Furthermore, an assignment based on the prescribed medication provides only limited information: many of the drugs are either approved for both LC types or are used off-label, making it difficult to assign them to a specific LC type. Overall, 25% of the LC patients were unambiguously identifiable as NSCLC vs SCLC based on the ICD-10 code, the drug therapy, and the billing data.ConclusionsThe current coding system appears to be of limited suitability for drawing conclusions about LC and therefore the SHI patient population. This makes it difficult to analyze the healthcare data with the aim of gathering new knowledge to improve needs-based care. The approach chosen for this study did not allow for development of a LC differentiation algorithm based on the available healthcare data. However, a better overview of patient specific needs could make it possible to modify the range of services provided by the SHI funds. From this perspective, it makes sense, in a first step, to refine the ICD-10 system to facilitate NSCLC vs. SCLC classification.

Optimal Tariffs, Increasing Marginal Costs and Endogenous Delegation: Uniform vs. Discriminatory Tariffs

Optimal Tariffs, Increasing Marginal Costs and Endogenous Delegation: Uniform vs. Discriminatory Tariffs

How to protect the U.S. forest products industry from the perspective of trade? A comparison of policies within the forest supply chain

With the accelerating globalization, many industries have faced continuous pressure from increasing importation. To protect the domestic industries, trade policies such as uniform tariffs have been widely used in recent years. In this study, the interaction between uniform tariffs on the primary roundwood and secondary wood and paper products within the U.S. forest supply chain is assessed. A two-stage partial equilibrium displacement model is firstly developed within a two-input and two-output system, estimating both the vertical and horizontal linkage between primary and secondary forest products. Four scenarios are assessed: single-tariff separately imposed on roundwood/paper/wood products, and simultaneously imposed on all of them. To test the parameter uncertainty, stochastic simulations are employed by randomly changing elasticities under a triangular distribution. The results show that the impacts of U.S. import tariffs on different categories of forest products vary through the forest supply chain. Although the U.S. consumers of wood and paper products in general suffer from its import tariffs, timber landowners better off in all tariffed scenarios. In designing policies to protect the U.S. forest products industry, import tariffs on secondary wood products are encouraged, compared with tariffs on other forest products.

Trade restrictiveness indexes and welfare: A structural approach

AbstractTrade restrictiveness indexes (TRIs) have become a staple for practitioners and policy‐makers to summarize international trade barriers. TRIs theoretically found a measure of trade restrictiveness by calculating the uniform tariff that is welfare equivalent to the observed distribution of applied tariffs within a country. Here we incorporate importer market power and exporter heterogeneity into calculations of TRIs and welfare globally. To do so, we structurally estimate a quantitative model of international trade. The structure of the model allows tractable estimation of importer and exporter welfare and TRIs for every country in the world from 1990 to 2007. Canonical estimates, which ignore exporter heterogeneity and importer market power, are shown to overstate efficiency losses from tariffs by a factor of 5 for the average importer. Additionally, by not accounting for importer market power canonical methods fail to measure substantial welfare losses to exporters that are captured by importers through tariffs. These channels are shown to significantly impact the measurement and interpretation of TRIs. To conclude, we employ the methodology to evaluate China's WTO accession and a counterfactual renegotiation of NAFTA.

Optimal tariffs and firm technology choice: An environmental approach

AbstractThis paper analyzes environmental concerns by a government in a setting of rent‐extracting strategic trade policy with endogenous firm investment into production technologies. The simple analysis reinforces the importance of investment incentives caused by tariffs in general and shows that the resulting implications for the optimal tariff decision can be completely different between traditional tariff considerations and an environmentally conscious government. We show that an importing country in a dynamic setting with endogenous firm technology choices prefers to impose discriminatory tariffs both ex post and ex ante when emissions matter, while—as previously found in the literature—a commitment to uniform tariffs is optimally chosen when environmental concerns do not play a role.

It is all in the details: A bilateral approach for modelling trade agreements at the tariff line

AbstractPolicymakers are increasingly relying on computable general equilibrium (CGE) models to provide economy‐wide impacts of trade agreements; however, these assessments often make the simplifying assumption of complete bilateral tariff elimination. But agreements typically involve partial tariff elimination for sensitive sectors—which are often differentiated at the tariff line. As such, applying a uniform tariff reduction in a CGE sector that encompasses many products could introduce bias. We propose a tariff line approach for modelling exemptions for sensitive goods in CGE models with the aim of reducing this bias. This approach is tested for the Canada–EU trade agreement, and systematically compared to standard approaches to bilateral trade liberalisation in CGE analysis. We find that more common approaches might systematically overestimate trade and welfare impacts by neglecting partial liberalisation in selected sectors and/or not considering substitution across tariff lines.

Comparison Between Uniform Tariff and Progressive Consumption Tax in the Chinese Automobile Industry*

This paper studies the protectionist effect of a non‐trade policy — a consumption tax — compared to that of a tariff on the Chinese automobile market. Our empirical findings suggest that both the consumption tax and the tariff can protect domestic automakers’ market shares, but they can only shift a small portion of demand from imported cars to domestic cars. This demand exclusion is caused by the weak substitution between imported cars and domestic cars, and it is the underlying reason for the welfare loss caused by both the tariff and the consumption tax. A change in the consumption tax favorable to domestic manufacturers is equivalent to an additional 28% tariff, beyond the explicit 25% tariff, in terms of its protective effect on domestic manufacturers’ market shares.

A Second-Best Argument for Low Optimal Tariffs

We derive a new formula for the optimal uniform tariff in a small-country, heterogeneous-firm model with roundabout production and a nontraded good. Tariffs are applied on imported intermediate inputs. First-best policy requires that markups on domestic intermediate inputs are offset by subsidies. In a second-best setting where such subsidies are not used, the double- marginalization of domestic markups creates a strong incentive to lower the optimal tariff on imported inputs. In a 186-country quantitative model, the median optimal tariff is 10%, and negative for five countries, as compared to 27% in manufacturing from the one-sector, optimal tariff formula without roundabout production.

IMPACTS OF MECHANISMS TO PROMOTE PARTICIPATION IN CLIMATE MITIGATION: BORDER CARBON ADJUSTMENTS VERSUS UNIFORM TARIFF MEASURES

Because free-riding behavior is an inherent characteristic of climate change, how to protect the economic benefits of the emission reduction regions and prompt the noncooperative region to join the emission reduction coalition is particularly important. In this study, we use a global multi-region multi-sector CGE model to compare the impacts of border carbon adjustment (BCA) and two unified tariff mechanisms based on different implementation principles on USA. The results show that the BCA is more effective in reducing carbon leakage in USA than the uniform tariff mechanisms. However, for GDP and welfare losses, the scenario Tariff-carbon-reduction results in greater GDP and welfare losses in USA, which is more conducive to prompting USA to implement carbon reduction policies than the BCA measures. Finally, the sensitivity analysis of carbon price levels and key substitution elasticity further confirmed the results.

A welfare analysis of China's tariffs on U.S. hardwood products

China has been the top importer of U.S. log and lumber since 2010. With the ongoing trade disputes between the U.S. and its trading partners, especially with China, it is of great interest to assess the potential impacts of different trade interventions on U.S. forest sector. In this study, we focus on hypothetical uniform tariffs by China on U.S. hardwood products in four scenarios: tariffs imposed on log, lumber, and veneer, respectively, and on these products altogether. With an emphasis on U.S. timberland owners as log producers, a two-stage partial equilibrium displacement model is applied to measure the vertical linkage between log and its secondary products, lumber and veneer, as well as the horizontal linkage between lumber and veneer. Assuming a 25% uniform tariff, our results show that the welfare effects on stakeholders in four scenarios highly differ but U.S. timberland owners suffer substantial welfare loss as a whole in all scenarios. U.S. consumers of lumber and veneer, on the contrary, benefit from China's uniform tariffs in general. The total of China's consumer surplus is negative with its import tariffs on log, lumber, and all three products. Vertical and horizontal linkages within the U.S. hardwood sector are confirmed in all scenarios. Lastly, trade deflection effect is captured as the U.S. would export more hardwood products to the rest of world (ROW), resulting in positive but small changes in consumer surplus in the ROW, in all scenarios.

Evaluating Physical and Fiscal Water Leakage in Water Distribution System

With increasing population, the need for research ideas on the field of reducing wastage of water can save a big amount of water, money, time, and energy. Water leakage (WL) is an essential problem in the field of water supply field. This research is focused on real water loss in the water distribution system located in Ethiopia. Top-down and bursts and background estimates (BABE) methodology is performed to assess the data and the calibration process of the WL variables. The top-down method assists to quantify the water loss by the record and observation throughout the distribution network. In addition, the BABE approach gives a specific water leakage and burst information. The geometrical mean method is used to forecast the population up to 2023 along with their fiscal value by the uniform tariff method. With respect to the revenue lost, 42575 Br and 42664 Br or in 1562$ and 1566$ were lost in 2017 and 2018, respectively. The next five-year population was forecasted to estimate the possible amount of water to be saved, which was about 549627 m3 and revenue 65,111$ to make the system more efficient. The results suggested that the majority of losses were due to several components of the distribution system including pipe-joint failure, relatively older age pipes, poor repairing and maintenance of water taps, pipe joints and shower taps, negligence of the consumer and unreliable water supply. As per the research findings, recommendations were proposed on minimizing water leakage.