Beyza Ural-Marchand
Publications in 2019
(the rest of my work is available here: https://www.beyzaural.com/publications
- "Food for Fuel: The Effect of U.S. Energy Policy on Indian Poverty" (with Ujjayant Chakravorty
and Marie Hubert), Quantitative Economics, Econometric Society, 10(3), 2019, 1153-1193.
The United States has been the most aggressive nation in encouraging the use of biofuels in the transportation sector. About 10% of U.S. gasoline now comes from ethanol produced from corn, making it the largest consumer of biofuels in the world. This share is expected to rise several-fold with the advent of second-generation biofuels under the Renewable Fuels Standard (RFS) Brazil, the European Union, China and other countries have similar policies that divert corn, sugar cane and other crops from food to energy. This policy is controversial because it uses scarce land resources that displace food for energy production, leading to an increase in food prices. Using micro-level survey data, we trace the effect of the RFS on world food prices and their impact on household-level consumption and wage incomes in India. Our model predicts that world prices for these commodities rise by 8-16% due to the RFS. Poor rural households suffer significant welfare losses due to higher prices of consumption goods, while they benefit from a rise in wage incomes, mainly because most of them are employed in agriculture. Urban households also bear the higher cost of food but do not see a concomitant rise in wages because only a small fraction of them work in food-related industries. We estimate that the mandate leads to about 26 million new poor: 21 million in rural and five million in the urban population
Links to the paper:
Ungated: https://sites.ualberta.ca/~ural/files/BiofuelsNovember2018.pdf
Published version: https://onlinelibrary.wiley.com/doi/full/10.3982/QE942 - "Inequality and Trade Policy: Pro-Poor Bias of Contemporary Trade Restrictions," Review of Income and Wealth, 65(S1), 2019, 123-152.
There is a large literature on the impact of international trade on inequality in developing countries. However, there is little known about the pro-poor bias of contemporary trade policies. This paper investigates the pro-poor bias of the contemporary trade protection structure. The empirical method used in the paper allows us to characterize trade policies of countries as regressive or progressive with respect to two main channels, household expenditure, and household wage income, by studying the impact of removing all protectionist tools including tariffs and non-tariff barriers. A protection structure is characterized as pro-poor, or progressive if removal of current trade restrictions leads to higher welfare gains (or smaller welfare loss) for rich individuals as compared to poor individuals, as it implies that the richer households bear a disproportionate burden of the trade protection. On the other hand, a protection structure is deemed to be pro-rich, or regressive, if poor individuals experience higher welfare gains (or smaller welfare loss) from the elimination of trade barriers. As trade protection structure may have different distributional impacts through different channels, the overall welfare effect of trade policy thus depends on the distributional properties and relative magnitudes or expenditure and earnings effects. I study the trade protection structure in India, a country with high poverty levels as well as a relatively high trade protection levels. The results suggest that the Indian protection structure has opposing effects through the two channels. On one hand, the protection level is higher for products that have a high budget share for poor individuals. The price effect associated with higher levels of protection causes disproportionate welfare loss for the poorer households by increasing the cost of consumption. On the other hand, trade protection is biased towards industries in which poorer workers are concentrated, thus the protection structure is pro-poor in the sense that it disproportionately protects low per capita expenditure individuals. However, the regressive effect through the cost of consumption dominates the progressive effect through wage incomes. While the trade protection structure is successful in protecting poorer households through earnings channel, it places a disproportionate burden on the households on the low end of the distribution through the expenditure channel.
Links to the paper:
Ungated: https://sites.ualberta.ca/~ural/files/ProPoorTrade.pdf
Published version: https://onlinelibrary.wiley.com/doi/full/10.1111/roiw.12433