Article ID Journal Published Year Pages File Type
5068537 European Journal of Political Economy 2007 16 Pages PDF
Abstract

Trade policies which aid a domestic industry also increase the domestic price of the traded good. Consumers who heavily consume the protected good may find that this price rise reduces the marginal utility of income. The lower marginal utility of income may in turn reduce political pressures to redistribute income to such consumers. Taxpayers opposing redistribution may therefore favor trade protection. And because different policies (such as tariffs and quotas) differ in how they affect the marginal utility of income, taxpayers may favor one policy over another.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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