GTAP-POV: A Framework for Assessing the National Poverty Impacts of Global Economic and Environmental Change

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Hertel, Thomas W.;
Verma, Monika;
Ivanic, Maros;
Magalhaes, Eduardo;
Oct 2015
Increasingly economists are being called on to assess not only the national implications of global trade and environmental policies, but also the subnational consequences, including the impacts on low income and food insecure households. Bridging global, national and subnational scales within a single analytical framework presents great challenges. The purpose of this Technical Paper is to outline in detail one approach to this problem. By nesting a poverty module within the GTAP modeling framework, users are able to assess the impact of global trade and environmental policies, as well as prospective climate change, on poverty across seven different strata or sub-populations within the focus countries. The application demonstrated here that of multilateral trade reforms demonstrates that the poverty impacts of global policies can be quite heterogeneous and sometimes unexpected.

Since the initial publication of this Technical Paper, others have sought to extend the sample of countries covered in the GTAP-POV module. This has led to the development of improved techniques for dealing with challenges posed by the household survey data. This revised version of the technical paper includes four appendices which provide STATA code to accomplish key steps in the process of constructing a GTAP-POV module for an individual country. We have also included a new section at the end of part 3 of the paper in which we compare patterns of poverty across the full range of countries available to us at this point in time. Our hope is that this Technical Paper will continue to inspire members of the GTAP network, as well as others, to contribute additional poverty modules. Eventually we hope to cover most developing countries. This would permit more definitive analysis of the poverty impacts of global economic and environmental policies.