Torsten Jaccard, "Who Pays for Protectionism? The Welfare and Substitution Effects of Tariffs"
Job talk. Torsten Jaccard is a PhD Candidate at the University of Toronto.. He will present the paper "Who Pays for Protectionism? The Welfare and Substitution Effects of Tariffs".
This paper studies the distributional costs to US consumers of country-specific tariffs. By linking detailed household purchase records with a barcode-specific country-of-origin, I estimate a demand model with both detailed consumer heterogeneity and rich import substitution patterns in the face of country-specific tariff changes. Simulations using this model show that tariffs placed on low-income countries are regressive and anti-rural whereas tariffs on high-income countries are progressive and anti-urban. I provide novel evidence that the urban/rural disparity in exposure to tariff policy is driven by the extent to which retail market characteristics differ across urban and rural counties in the US. When modeling import substitution, I combine descriptive text on the packaging of each barcode with unsupervised clustering algorithms to place barcodes into market segments of observable similarity. In general, I estimate lower tariff costs when compared to a model in which varieties are segmented based on their production location, as is common in the trade literature. These findings caution against the practice of estimating consumption gains from trade in the absence of (1) detailed variety attribute data and (2) information regarding the domestic alternatives available to consumers.
Host: Andreas Moxnes
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