





Nominal tariff rate %26amp; Effective rate of protection ( Effective tariff rate)
The nominal tariff rate is simply the rate listed in a counry's tariff schedule, whether it is an ad valorem tariff or a specific tariff that can be converted to an ad valorem equivalent by dividing the specific tariff amount per unit by the price of the good. Economists employing the nominal rate are concernedwiththe extent to which the price of good to domestic consumers is raised by the existence of the tariff.
The effective rate of protection is the percentage change in the value added in an industry because of the imposition of a tariff structurebythe country rather than the existence of free trade. Economists employing ERP are concernedwiththe extent to which %26quot;value added%26quot; in the domestic import-competing industy is altered by the existence of the whole tariff structure.
EPR=(value added under protection - value added with free trade) / value added with free trade
From: Dennis R. Appleyard, Alfred J. Field. Jr. International economics. 3d ed Chapter 14