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Reproducibility package for Bilateral Import Demand Elasticities And Balanced Trade Protection

2026
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Reference ID
RR_WLD_2026_714
Author(s)
Hiau Looi Kee, Ileana Cristina Neagu, Yoto V. Yotov
Collections
World Bank Policy Research Working Papers
Metadata
JSON
Created on
Sep 02, 2026
Last modified
Sep 02, 2026
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  • Overview
  • Reproducibility Package
  • Description
  • Scope and coverage
  • Disclaimer
  • Access and rights
  • Contacts
  • Information on metadata

    • Overview

    Abstract

    Recognizing that macroeconomic conditions determine aggregate trade imbalances, can tariffs eliminate bilateral trade deficits? We introduce the Balanced Trade Tariff Index (BTTI), the uniform tariff that closes bilateral deficits while holding macroeconomic conditions fixed. The BTTI requires bilateral, product-level import demand elasticities, which we estimate using a translog GDP function for seven major economies. The resulting elasticity estimates exhibit substantial heterogeneity across importers, exporters, products, and trade directions. Accounting for this heterogeneity lowers average BTTIs relative to homogeneous-elasticity benchmarks but requires substantially higher tariffs for exporters of inelastic products, highlighting the limits of tariffs for balancing bilateral trade deficits.

    Reproducibility Package

    Scripts
    Get Reproducibility Package
    File name
    RR_WLD_2026_714
    Zip package
    RR_WLD_2026_714.zip
    Title
    Reproducibility package for Bilateral Import Demand Elasticities And Balanced Trade Protection
    Date
    2026-08
    Dependencies
    Stata dependencies are listed in the ado folder.
    Instructions
    See README in reproducibility package.
    Notes
    Computational reproducibility verified by Development Impact (DECDI) Analytics team, World Bank.
    Source code repository
    Repository name URI
    Reproducible Research Repository (World Bank) https://reproducibility.worldbank.org
    Software
    Name
    Stata
    Version
    MP 19.5

    Reproducibility

    Technology environment

    Paper exhibits were reproduced on a computer with the following specifications:
    • OS: Windows 11 Enterprise
    • Processor: Intel(R) Xeon(R) Gold 6226R CPU @ 2.90GHz
    • Memory available: 32.0 GB
    Technology requirements

    Run time: ~5 minutes.
    Reproduction instructions

    The replication package starts from cleaned datasets and these are not included in the package.

    To reproduce the findings in this paper, a replicator must:

    1. Secure Access to Data: Access the datasets not included in the package. See the Datasets section for more details.
    2. Run the Package:
    • Update the working directory in line 8 of the do-file Prepare tables and figures, and run it.

    Since not all the data is included, the package includes the results produced by replicators. These files can be used to review the results presented in the paper.

    Data

    Datasets
    Name
    Bilateral Import Demand Elasticities
    Note
    Source: Authors' compilation based on tariff data from the Trade Analysis and Information System (TRAINS)/World Integrated Trade Solution (WITS), bilateral trade data from the Centre d'Etudes Prospectives et d'Informations Internationales - Base pour l'Analyse du Commerce International (CEPII-BACI, version 202601), and macroeconomic indicators from the World Bank World Development Indicators (WDI). Description: Bilateral import demand elasticities for 7 importers (United States, European Union, Canada, China, India, Japan, and Mexico) at the HS 6-digit level (2007 HS nomenclature). Period covered: 2010–2023. Dataset construction date: April 2026. File location: "DATASETS\ELASTICITIES".
    Access policy
    Data is forthcoming in the World Bank Development Data Hub.
    Citation
    Kee, Hiau Looi, Ileana Cristina Neagu, and Yoto V. Yotov. (2026). "Bilateral Import Demand Elasticities" [dataset]. World Bank.
    Name
    Balanced Trade Tariff Index (BTTI) for the United States
    Note
    Source: Authors' compilation. Description: Contains the Balanced Trade Tariff Index (BTTI) and related tariff indexes for the United States, combining bilateral import demand elasticities and 2023 trade values. Importers covered: all countries for which U.S. elasticities were computed. Period covered: 2023. Dataset construction date: April 2026. File location: "DATASETS". File names: BTTI_USA.dta.
    Access policy
    Data is forthcoming in the World Bank Development Data Hub.
    Citation
    Kee, Hiau Looi, Ileana Cristina Neagu, and Yoto V. Yotov. (2026). "Bilateral Trade Tariff Index for the United States" [dataset]. World Bank.
    Name
    Deadweight Loss (DWL) of Tariffs for the United States
    Note
    Source: Authors' compilation. Description: Contains estimates of the deadweight loss (DWL) associated with the Balanced Trade Tariff Index (BTTI) and related tariff indexes for the United States. Based on bilateral import demand elasticities and 2023 trade values. Importers covered: all countries for which U.S. elasticities were computed. Period covered: 2023. Dataset construction date: April 2026. File location: "DATASETS". File names: DWL_USA.dta.
    Access policy
    Data is forthcoming in the World Bank Development Data Hub.
    Citation
    Kee, Hiau Looi, Ileana Cristina Neagu, and Yoto V. Yotov. (2026). "Deadweight Loss of Tariffs for the United States" [dataset]. World Bank.
    Data statement

    All data is temporarily embargoed by the authors (expected to be made public in the future).

    Description

    Output
    Type
    Working Paper
    Title
    Bilateral Import Demand Elasticities And Balanced Trade Protection
    Description
    Policy Research Working Papers (PRWP)
    Authors
    Author Affiliation Email
    Hiau Looi Kee World Bank hlkee@worldbank.org
    Ileana Cristina Neagu World Bank ineagu@worldbank.org
    Yoto V. Yotov Drexel University yotov@drexel.edu
    Date of production

    2026-08-31

    Scope and coverage

    Geographic locations
    Location Code
    World WLD
    Keywords
    Tariffs Balanced Trade Bilateral Import Demand Elasticity Trade Deficits
    Topics
    ID Topic Parent topic ID Vocabulary Vocabulary URI
    F13 Trade Policy • International Trade Organizations F1 Journal of Economic Literature (JEL)
    F14 Empirical Studies of Trade F1 Journal of Economic Literature (JEL)
    O11 Macroeconomic Analyses of Economic Development O1 Journal of Economic Literature (JEL)

    Disclaimer

    Disclaimer

    The materials in the reproducibility packages are distributed as they were prepared by the staff of the International Bank for Reconstruction and Development/The World Bank. The findings, interpretations, and conclusions expressed in this event do not necessarily reflect the views of the World Bank, the Executive Directors of the World Bank, or the governments they represent. The World Bank does not guarantee the accuracy of the materials included in the reproducibility package.

    Access and rights

    License
    Name URI
    MIT License https://opensource.org/license/mit
    World Bank IGO Rider https://github.com/worldbank/metadata-editor/blob/main/WB-IGO-RIDER.md

    Contacts

    Contacts
    Name Affiliation Email
    Hiau Looi Kee World Bank hlkee@worldbank.org
    Reproducibility WBG World Bank reproducibility@worldbank.org

    Information on metadata

    Producers
    Name Abbreviation Affiliation Role
    Reproducibility WBG DECDI World Bank - Development Impact Department Verification and preparation of metadata
    Date of Production

    2026-08-31
    Document version

    1
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