The Distributional Effects of Trade Policy in Tunisia

The main aim of this project is to estimate the distributional effects of trade policy at the micro level, using household survey data. To our knowledge this has not yet been done for Tunisia. The main approach consists on investigating how trade reforms affect domestic prices and to what extent these changes, in turn, translate into changes in household welfare. There are a number of channels through which households are affected. First, as consumers they benefit from lower prices, second as producers the opposite is the case and they are hurt by lower prices, and finally as income earners prices can also affect employment and wages and benefit also from higher prices, which could attract more producers into a given industry and increase employment and subsequently also wages.