Search

Erosion of trade preferences currently being enjoyed by the least developed countries (LDCs) and some developing countries remains an important area in the ongoing trade negotiations. The different positions regarding the preference erosion question besides being informed by political economy considerations are also founded on empirical results of this particular question. But does the methodology used for the empirical analysis matter? In this article, the importance of preference erosion due to MFN liberalization on agriculture is analyzed. Drawing from the potential complementary strengths in triangulation, the article uses both partial and general equilibrium analyses. The article shows that the ranking of preference erosion as an issue of policy concern is influenced by the empirical methodology adopted. However, irrespective of the rank, the article concludes that preference erosion is an important issue not only in terms of welfare, but also as it has impacts on incomes for preference-receiving countries. [ABSTRACT FROM AUTHOR]

This article shows that the observed sample adoption rate does not consistently estimate the population adoption rate even if the sample is random. It is proved that instead the sample adoption rate is a consistent estimate of the population joint exposure and adoption rate, which does not inform about adoption per se. Likewise, it is shown that a model of adoption with observed adoption outcome as a dependent variable and where exposure to the technology is not observed and controlled for cannot yield consistent estimates of the determinants of adoption. The article uses the counterfactual outcomes framework to show that the true population adoption rate corresponds to what is defined in the modern policy evaluation literature as the average treatment effect (ATE), which measures the effect or impact of a “treatment” on a person randomly selected in the population. In the adoption context, a “treatment” corresponds to exposure to the technology. The article uses the ATE estimation framework to derive consistent nonparametric and parametric estimators of population adoption rates and their determinants and applies the results to consistently estimate the population adoption rates and determinants of the NERICA (New Rice for Africa) rice varieties in Côte d'Ivoire. The ATE methodological approach developed in the article has significant policy implications with respect to judging the intrinsic merit of a new technology in terms of its potential demand by the target population independently of issues related to its accessibility and in terms of the decision to invest or not in its wide-scale dissemination. [ABSTRACT FROM AUTHOR]