The Value of Time in Trade – GTAP Database of AVEs for Estimating the Impacts of Swift Customs Clearance and Shipping V8.1

Overview
Data and Documentation
Contributors
Selected Literature
Estimates of the Value of Time in Trade
General CGE Applications of the Value of Time in Trade
CGE Analysis, Poverty and Distributional Impacts of the Value of Time in Trade

Overview

With the conclusion of the Bali talks, trade ministers around the world will be seeking approval of the “Bali Package” in national forums. The Bali Package includes significant enhancements in trade facilitation. The impacts of trade facilitation can often be understood in two parts, direct and indirect impacts. Frequently, the indirect, time delay inducements of regulations, can have the most significant impact on a counties trade flows when compared to direct costs of trade and tariffs.

Direct customs costs and shipping costs are those which arise from the consumption of real resources in the movement of goods and are well represented by customs, shipping fees, and the costs of traders to manage the movement of goods.

Indirect costs (the subject of this database) are measured as importers willingness to pay to move goods faster, either by streamlining customs procedures, inspections or security requirements. The benefits of efficient (rapid) customs and shipping arise from manufactures need and willingness to pay to receive inputs in a timely manners (just in time delivery) and consumers’ willingness to pay for goods which have rapid market depreciation (e.g., smartphones, electronics, fresh fruit and flowers). Recent research has shown the indirect costs of customs procedures often exceed tariff barriers in many countries (Hummels et. al. 2007 see below).

Data and Documentation

The following paper and supporting data files document, and provide a database of the value of time by the 57 GTAP sectors and 134 countries:

Documentation:

GTAP-Time-Costs-as-a-Barrier-V81-2013-R2

Data:

GAMS (GDX) Data File	Time_Version_81_GDX (375)
GEMPACK (HAR) Data File	Time_Version_81_HAR (539)

Contributors

David Hummels – is an Economist and Professor in the Department of Economics, Krannert School of Management, Purdue University and a Research Associate at the National Bureau of Economic Research (NBER). http://www.mgmt.purdue.edu/faculty/hummelsd/

Peter Minor – is the Managing Director of ImpactECON, LLC and a GTAP Research Fellow.

Selected Literature

The following papers provide further information on the derivation of the value of time in trade and related applications in CGE modeling. We list, in many cases, official journal publications. However, we link to a free version, if available, which are often early working papers. Readers are encouraged to obtain official journal versions, where practical.

Estimates of the Value of Time in Trade

Hummels, D. and Schaur, G. 2013. “Time as a Trade Barrier,” American Economic Review, vol. 103, 1-27.

Hummels, D. 2011. “Calculating the Value of Time in South-South Trade,” Arlington, VA: Nathan Associates Inc., for the United States Agency for International Development (USAID)

Simeon Djankov & Caroline Freund & Cong S. Pham, 2010. “Trading on Time,” The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 166-173, February.

Hummels, D., Minor, P., Reisman, M., and Endean, E. 2007. “Calculating Tariff Equivalents for Time in Trade,” Arlington, VA: Nathan Associates Inc., for the United States Agency for International Development (USAID)

Hummels, D. 2001. “Time as a Trade Barrier,” GTAP Working Papers 1152, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.

General CGE Applications of the Value of Time in Trade

Mevel, S. and Karingi, S. 2012 “Deepening Regional Integration in Africa: A Computable General Equilibrium Assessment of the Establishment of a Continental Free Trade Area followed by a Continental Customs Union,” GTAP Resource Paper #3900, Purdue University, West Lafayette, Indiana, USA.

Stone, S., & Strutt, A. (2010). “Transport Infrastructure and Trade Facilitation in the Greater Mekong Subregion,” In D. H. Brooks & S. Stone (Eds.), Trade Facilitation and Regional Cooperation in Asia (pp. 156-191): Edward Elgar. Working paper version available as ADBI Working Paper No 130. Tokyo: Asian Development Bank Institute (ADBI).

Strutt, A., Stone S, and Minor P. 2008 “Trade Facilitation in the Greater Mekong Sub-region: Impacts of Reducing the Time to Trade,” Journal of Greater Mekong Sub-region Development Studies 4: 1-20, The Asian Development Bank Institute (ADBI), Manila, Philippines. GTAP Application.

Minor, P., and Tsigas, M. 2008. “Impacts of Better Trade Facilitation in Developing Countries: Analysis with a New GTAP Database for the Value of Time in Trade,” GTAP Resource Paper #2762, Purdue University, West Lafayette, Indian, USA.

Hertel, T., Walmsley, T., and Ikatura, K. 2001. “Dynamic Effects of the ‘New Age’ Free Trade Agreement between Japan and Singapore,” Journal of Economic Integration 24: 1019-1049.

CGE Analysis, Poverty and Distributional Impacts of the Value of Time in Trade

Minor, P. and Mureverwi, B. 2013 “A GTAP Household Analysis of African Trade Liberalization: The Case of Mozambique,” GTAP Resource Paper # 4213, Purdue University, West Lafayette, Indian, USA.

Stone, S., Strutt, A., & Hertel, T. W. (2012). “Socio-economic Impact of Regional Transport Infrastructure in the Greater Mekong Subregion,” In B. N. Battacharyay & M. Kawai (Eds.), Infrastructure for Asian Connectivity (pp. 95-138). Cheltenham and Massachusetts: Edward Elgar. Working paper version available as ADBI Working Papers 234, Asian Development Bank Institute.