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Globalization, Consumer's Preference, and Welfare in India: Results from CGE Model

Globalization, Consumer's Preference, and Welfare in India: Results from CGE Model

Koushik Das
Copyright: © 2015 |Pages: 25
ISBN13: 9781466682740|ISBN10: 1466682744|EISBN13: 9781466682757
DOI: 10.4018/978-1-4666-8274-0.ch006
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MLA

Das, Koushik. "Globalization, Consumer's Preference, and Welfare in India: Results from CGE Model." Handbook of Research on Globalization, Investment, and Growth-Implications of Confidence and Governance, edited by Ramesh Chandra Das, IGI Global, 2015, pp. 109-133. https://doi.org/10.4018/978-1-4666-8274-0.ch006

APA

Das, K. (2015). Globalization, Consumer's Preference, and Welfare in India: Results from CGE Model. In R. Das (Ed.), Handbook of Research on Globalization, Investment, and Growth-Implications of Confidence and Governance (pp. 109-133). IGI Global. https://doi.org/10.4018/978-1-4666-8274-0.ch006

Chicago

Das, Koushik. "Globalization, Consumer's Preference, and Welfare in India: Results from CGE Model." In Handbook of Research on Globalization, Investment, and Growth-Implications of Confidence and Governance, edited by Ramesh Chandra Das, 109-133. Hershey, PA: IGI Global, 2015. https://doi.org/10.4018/978-1-4666-8274-0.ch006

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Abstract

The purpose of the present chapter is to analyse general equilibrium effects of different trade liberalization policies for India under imperfectly competitive market structure. Since present day world trade is much akin towards the increasing returns to scale and market structure oriented industry behaviour, we have considered monopolistically competitive market structure for our analysis. Computable General Equilibrium (CGE) modelling has been applied as it seems to be relevant methodology for policy simulation. Consumer's love for variety and increasing returns to scale present in the sectors involving large fixed costs, are strong determinants of consumer's as well as producer's business confidence. Our study reveals that increased welfare gain due to trade and openness is not much larger as compared to standard perfect competition scenario as the scale economy benefit is predominant only in few sectors like capital goods industries and not prominently visible in large agricultural and informal manufacturing sectors.

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