effective rate of protection

Definitions

Economics

  • A measure of the protection provided to an industry by the entire structure of tariffs, taking into account the effects of tariffs on inputs as well as on outputs. Letting bij be the share of input i in the value of output j, and ti be the tariff on good i, the ERP of industry j is ERPj = (tj-Sibijti)/(1-Sibij).Due to Corden (1966).
  • abbreviationeffective tariff
    (written as Effective rate of protection)
  • synonymeffective protective rate
  • effective rate of protection.
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