Distributional effects of preferential and multilateral trade liberalization: the case of Paraguay

FIW, a collaboration of WIFO (www.wifo.ac.at), wiiw (www.wiiw.ac.at) and WSR (www.wsr.ac.at) FIW –Working PaperDistributional eff ects of preferential and multilateral trade liberalization: the case of ParaguayElizabeth Jane Casabianca1In this paper I apply Porto (2006) to Paraguay using household level data. The aim is to assess the distributional impact of the preferential and multilateral trade liberalization in a small member country. I also follow Nicita (2009) assuming incomplete pass-through on prices of traded goods which in turn influence both household consumption and earnings of household membersin the labour market. I estimate these effects highlighting the diff erence between the impact of the preferential trade agreement and the multilateral one. Finally, I am able to depict if and who trade integration has benefi ted