Non‐tariff measures and household welfare: Evidence from Ghana

Abstract

Most studies on the impacts of non‐tariff measures (NTMs) on economic outcomes are at the macro‐level with limited micro‐level studies. This study uses primary data on 604 commercial farm households in Ghana to examine the relationship between NTMs and household welfare outcomes. The results show that NTMs are positively associated with assets, household expenditure and income but negatively associated with food expenditure, household dietary diversity score (HDDS) and poverty probability index (PPI). We find that the results are not likely to be driven by unobserved heterogeneity. Our results suggest that the potential mechanisms through which NTMs influence welfare outcomes are household income and expenditure. The main implication of the study is that a reduction in the number of customs formalities and the cost of testing and certification can facilitate trade and contribute to the economic development of commercial farm households.