Dear all,
For my research I am analysing whether tariff reductions increase the probability that a product category is imported from a trading partner. However, when working with tariffs, I am concerned about reverse causality.
Besides data on actual implemented tariffs I also have data on the scheduled/planned tariffs. These are the tariff rates that were pre-determined in 1992 before the trade agreement went into force and were planned to be implemented until 2008.
Is it possible to use the scheduled/planned tariffs as a proxy for the actual implemented tariffs? The correlation between the two variables is high, but as the scheduled/planned tariffs were predetermined, they reduce the possibility of reverse causality. Is it correct to do this?
Dear Ilona van Schaik,
I suggest to you look at links, attached files and publication in your subject.
- Investing in Human Capital for Economic Development in China
https://books.google.dz/books?isbn=9812814426
- Encyclopedia of Health Economics
https://books.google.dz/books?isbn=0123756790
Best regards
Article Techniques for dealing with reverse causality between instit...
It seems your way is true.. however you can check out some databases to find another variable.
First, why are you looking at the probability a product category is imported? Don't you have data on actual imports? What reverse causality are you concerned about? Whether imports cause tariffs? The citations above are good possible starting points, but I would question why you are thinking about probabilities and not volumes/values.
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