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Welfare Effects of Trade Associations: The Case of the Chilean Salmon Export Industry

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The RAND Journal of Economics

Published online on

Abstract

["The RAND Journal of Economics, EarlyView. ", "\nABSTRACT\nThis article examines the welfare consequences of a trade association in an exporting country on consumers in destination countries. We estimate a structural model of the Chilean Salmon exporting industry that endogenizes firms' pricing and export decisions. Our results show that the trade association has a positive effect on consumer utility and involves higher marginal costs of production, consistent with higher quality products. Reduced form analysis estimates price effects associated with trade association membership of 3 to 8 percent. Our counterfactual analysis reveals that eliminating the trade association would reduce consumer welfare by 1.7 billion USD in destination countries."]