A Methodology for Tariffication of Commodity Trade in the Presence of Quality Differences -- The Case of Peanuts

Multilateral trade rounds have stressed converting non tariff barriers to simple tariffs. The WTO Agreement on Agriculture includes the "price-gap" method that was prominent in the Uruguay Round. Many agricultural products, once considered commodities, are in fact differentiated products with Klein-Leffler price premiums linked to quality and other characteristics. This paper employs an hedonic pricing model to measure the shadow-prices of differential characteristics in peanuts that enter international trade. This shadow prices must be accounted for in the tariffication exercise to produce the least distorting tariffs