PRESENTED BY Matthew Grant (Dartmouth College)
Classification systems group heterogeneous objects such as products into categories called “codes” and define what level of policy, such as tariffs, will be applied to each group. Accounting for the motives underlying the design of classification systems has important implications for empirical research. Taking the classification of U.S. imports as a leading example, its design is shown to be consistent with a model where the choice of which things to group together reflects the objectives of the policymaker. Product codes vary greatly in their size and specificity – codes are more subdivided when tariffs are high, and when codes are more subdivided goods within them are more similar. Accounting for these patterns changes our understanding of important empirical relationships such as the one between tariffs and demand elasticities.
Matthew Grant is an assistant professor of economics at Dartmouth College. His research focuses on international trade and trade policy. He received his PhD from Yale University.
Chair: John Morrow, King’s College London
Discussant: Monique Ebell, Department for Business and Trade