Globalization and Poverty: Channels and Policy Responces by Maurizio Bussolo, Jeffery I Round

By Maurizio Bussolo, Jeffery I Round

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Sample text

It is our hope that these quantitatively-based studies lead to a better understanding of their consequences. Notes 1 Parts of this section are further elaborated in Bussolo and Nicita (2004). 2 See Goldberg and Knetter (1997) for a review, and Nicita (2003) for an application to trade liberalisation. 3 For instance, increased relative wages for skilled labour are observed in many developing countries abundantly endowed with unskilled labour: Slaughter and Swagel (1997) cite evidence for Mexico, Meller and Tokman (1996) study the Chilean case, and Sanchez and Nuñez (1998) examine the Colombian case.

Ideally time series data on demands for various goods, prices and incomes is needed to ensure a reasonable amount of variation in prices. Alternatively, one may use Deaton’s method of exploiting spatial variation in unit prices to estimate own and cross-price 32 Neil McCulloch elasticities (see Deaton and Grimard, 1992; Deaton, 1997). Nicita (2004) provides an example of the application of this approach to Mexico. Estimating these elasticities provides a partial equilibrium way of assessing the magnitude of ‘second round’ consumption effects of price reforms.

There is no modelling of markets per se but the paper embraces well-known features of the household economy, and agricultural household models, that are often missing in economy-wide empirical analysis. Niimi et al. set out and explore different channels of effect (price, wage and employment channels) of trade liberalisation and reform in Vietnam. They conduct an econometric analysis of trade liberalisation-induced household poverty dynamics, using panel data from a household survey. Various implications stem from the results detailing the effects of trade reforms on the movement into and out of poverty of individual households.

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