Estimating the impacts of US tariffs on UK exports of single malt Scotch whisky
This discussion paper aims to estimate the impact of US tariffs on UK exports of single malt Scotch whisky between Q4 2019 – Q4 2020 using the novel synthetic control method.
Annex B – Intermediate Synthetic Control Outputs
Synthetic Control Weights
Table B1 and Table B2 below show the country and predictor weights for the different lag specifications using value and quantity as the dependent variable at a quarterly frequency. Results for specifications using the price dependent variable and/or a monthly frequency are available upon request.
Country | Value | Quantity | ||||||
---|---|---|---|---|---|---|---|---|
No Lag | First Lag | Seas. Lag | First & S. Lag | No Lag | First Lag | Seas. Lag | First & S. Lag | |
1 Australia | .. | 0.164 | 0.161 | 0.164 | 0.172 | 0.098 | 0.096 | 0.099 |
2 Austria | 0.132 | .. | .. | .. | .. | .. | .. | .. |
3 Belgium | .. | .. | .. | .. | .. | .. | .. | .. |
4 Canada | 0.577 | 0.248 | 0.276 | 0.248 | 0.430 | 0.560 | 0.563 | 0.557 |
5 Chile | .. | .. | .. | 0.009 | .. | 0.003 | 0.002 | 0.003 |
6 Czechia | .. | 0.017 | .. | 0.017 | .. | .. | .. | .. |
7 Denmark | .. | .. | .. | .. | .. | .. | 0.021 | .. |
8 Finland | 0.086 | .. | .. | .. | .. | .. | .. | .. |
9 France | .. | 0.228 | 0.235 | 0.228 | .. | 0.033 | 0.013 | 0.031 |
10 Germany | .. | .. | .. | .. | .. | .. | .. | .. |
11 Hungary | .. | .. | .. | .. | .. | .. | .. | .. |
12 Iceland | .. | 0.015 | .. | 0.015 | .. | .. | 0.005 | .. |
13 Ireland | .. | .. | .. | .. | .. | .. | .. | .. |
14 Italy | 0.095 | .. | .. | .. | .. | .. | .. | .. |
15 Japan | .. | .. | .. | .. | .. | 0.063 | 0.038 | 0.061 |
16 Lithuania | .. | 0.019 | .. | 0.019 | .. | 0.153 | 0.164 | 0.156 |
17 Netherlands | .. | 0.039 | 0.047 | 0.039 | .. | 0.048 | 0.048 | 0.048 |
18 N. Zealand | .. | 0.016 | .. | 0.016 | .. | 0.021 | 0.025 | 0.023 |
19 Norway | 0.109 | .. | .. | .. | .. | .. | .. | .. |
20 Poland | .. | .. | .. | .. | 0.398 | .. | .. | .. |
21 Portugal | .. | 0.105 | 0.126 | 0.105 | .. | 0.004 | 0.009 | 0.004 |
22 Slovakia | .. | .. | .. | .. | .. | .. | .. | .. |
23 Slovenia | .. | .. | .. | .. | .. | .. | .. | .. |
24 South Africa | .. | .. | .. | .. | .. | .. | .. | .. |
25 South Korea | .. | .. | 0.013 | .. | .. | .. | .. | .. |
26 Spain | .. | 0.081 | 0.114 | 0.081 | .. | .. | .. | .. |
27 Sweden | .. | 0.057 | 0.027 | 0.057 | .. | 0.003 | .. | 0.004 |
28 Switzerland | .. | .. | .. | .. | .. | 0.013 | 0.017 | 0.014 |
.. : no weight placed (0.000); using the quarterly specifications with no population interpolation. Rounded to three decimal places.
Dependent Variable | Independent Variables |
No Lag | First Lag | Seas. Lag | First & S. Lag |
---|---|---|---|---|---|
Logged Export Value per Capita | First Lagged Dependent Variable | .. | 1.000 | .. | 1.000 |
Seasonal Lagged Dependent Variable | .. | .. | 0.051 | .. | |
Long-Term Interest Rate | .. | .. | .. | .. | |
GBP Exchange Rate | 0.032 | .. | 0.898 | .. | |
Logged Private Final Consumption (per cap) (Local) | .. | .. | .. | .. | |
Logged Private Final Consumption (per cap) (UK) | 0.323 | .. | 0.051 | .. | |
Monthly Dummy | 0.323 | .. | .. | .. | |
Average Alcohol Consumption (per cap) (2010-18) | 0.323 | .. | .. | .. | |
Distance between Capitals | .. | .. | .. | .. | |
Logged Export Quantity per Capita | First Lagged Dependent Variable | .. | 0.212 | .. | 0.124 |
Seasonal Lagged Dependent Variable | .. | .. | 0.078 | 0.033 | |
Long-Term Interest Rate | 0.027 | .. | 0.001 | .. | |
GBP Exchange Rate | 0.321 | .. | .. | .. | |
Logged Private Final Consumption (per cap) (Local) | 0.006 | .. | .. | .. | |
Logged Private Final Consumption (per cap) (UK) | 0.321 | .. | 0.078 | 0.124 | |
Monthly Dummy | 0.321 | .. | .. | .. | |
Average Alcohol Consumption (per cap) (2010-18) | .. | 0.787 | 0.843 | 0.719 | |
Distance between Capitals | 0.005 | .. | .. | .. |
.. : no or little weight placed (0.000 or < 0.0005); Using the quarterly specifications with no population interpolation. Rounded to three decimal places.
Post- to Pre-Treatment RMSPE Ratios
The following tables show ratios of the post-tariff fit to the pre-tariff fit (for the US). A ratio of > 1 would show that our synthetic control has a worse fit after the tariff, while a ratio of < 1 would show the opposite. These ratios themselves do not have much meaning without also looking at the ratios obtained from countries unaffected by the tariff (the placebo studies). Comparing these ratios with those obtained by the US would provide us with a p-value.
Dependent Variable | Period* | No Lag | First Lag | Seas. Lag | First & S. Lag |
---|---|---|---|---|---|
Logged Export Value per Capita | US Pre-Tariff | 0.23836 | 0.19924 | 0.20298 | 0.19917 |
US Post-Tariff | 0.26765 | 0.30455 | 0.30911 | 0.30151 | |
US Ratio** | 1.12291 | 1.52859 | 1.52289 | 1.51386 | |
Countries with Ratio ≥ US | 15/29 | 6/29 | 5/29 | 6/29 | |
Logged Export Quantity per Capita | US Pre-Tariff | 0.22948 | 0.16004 | 0.16304 | 0.16004 |
US Post-Tariff | 0.35667 | 0.20361 | 0.18330 | 0.20361 | |
US Ratio* | 1.55429 | 1.27221 | 1.12426 | 1.27221 | |
Countries with Ratio ≥ US | 3/29 | 13/29 | 19/29 | 13/29 | |
Logged Export Price | US Pre-Tariff | 0.14120 | 0.12383 | 0.12499 | 0.12383 |
US Post-Tariff | 0.13269 | 0.14933 | 0.15302 | 0.14933 | |
US Ratio* | 0.93975 | 1.20595 | 1.22430 | 1.20595 | |
Countries with Ratio ≥ US | 15/29 | 12/29 | 12/29 | 12/29 |
Using the monthly specifications with no interpolation or disaggregation. Rounded to five decimal places. * Pre-tariff is Jan 2010 to Oct 2019, post-tariff is Nov 2019 to Dec 2020; ** Larger ratios show larger differences between post- and pre-tariff fit, see equation (4).
Dependent Variable | Period* | No Lag | First Lag | Seas. Lag | First & S. Lag |
---|---|---|---|---|---|
Logged Export Value per Capita | US Pre-Tariff | 0.17703 | 0.11943 | 0.12009 | 0.11943 |
US Post-Tariff | 0.21071 | 0.28206 | 0.28489 | 0.28206 | |
US Ratio** | 1.19022 | 2.36168 | 2.37217 | 2.36168 | |
Countries with Ratio ≥ US | 13/29 | 2/29 | 2/29 | 2/29 | |
Logged Export Quantity per Capita | US Pre-Tariff | 0.14457 | 0.06657 | 0.06709 | 0.06656 |
US Post-Tariff | 0.31616 | 0.17758 | 0.17290 | 0.17787 | |
US Ratio* | 2.18689 | 2.66753 | 2.57719 | 2.67245 | |
Countries with Ratio ≥ US | 2/29 | 2/29 | 2/29 | 2/29 | |
Logged Export Price | US Pre-Tariff | 0.10643 | 0.09301 | 0.09453 | 0.09301 |
US Post-Tariff | 0.10326 | 0.12301 | 0.10881 | 0.12301 | |
US Ratio* | 0.97021 | 1.32256 | 1.15109 | 1.32256 | |
Countries with Ratio ≥ US | 16/29 | 10/29 | 14/29 | 10/29 |
Using the quarterly specifications with no interpolation. Rounded to five decimal places. * Pre-tariff is Q1 2010 to Q3 2019, post-tariff is Q4 2019 to Q4 2020; ** Larger ratios show larger differences between post- and pre-tariff fit, see equation (4).
Synthetic Control Predictor Values
The table below shows the average value of each variable for the particular weighted average of countries (synthetic control) for the pre-tariff period. Some of these values may be heavily skewed (for example, in the case of the exchange rate) due to certain countries being included in the weighted average. This is not necessarily a concern – only the difference in export value, quantity, or price is used in estimating the impact of tariff.
Table B5. Average synthetic control predictor values for the pre-tariff period
Export Value, Quantity, or Price | Local Private Final Consumption | UK Private Final Consumption | Population (b) | Interest Rate | GBP Exchange Rate | Avg. Alcohol Consumption 2010-18 | Distance Between Capitals | |
---|---|---|---|---|---|---|---|---|
See (a) for unit | £000's per capita | £000's per capita | Millions | % | Local currency / £ | Litres per cap | km | |
Monthly average for the Jan 2010 – Oct 2019 pre-tariff period | ||||||||
US | ||||||||
Value | 0.06 | 6.4 | 4.7 | 319.4 | 2.42 | 1.48 | 8.8 | 5.9 |
Quantity | 0.001 | 6.4 | 4.7 | 319.4 | 2.42 | 1.48 | 8.8 | 5.9 |
Price | 39.02 | 6.4 | 4.7 | 319.4 | 2.42 | 1.48 | 8.8 | 5.9 |
Synthetic control predictor averages | ||||||||
Value | 0.06 | 3.8 | 4.7 | .. | 2.27 | 46.10 | 9.6 | 5.1 |
Quantity | 0.001 | 4.1 | 4.7 | .. | 2.10 | 137.34 | 8.9 | 6.7 |
Price | 38.53 | 4.5 | 4.7 | .. | 1.59 | 10.94 | 9.2 | 3.0 |
Synthetic control weights (excl. lagged dep. vars. and/or monthly dummy) | ||||||||
Value | .. | 0.000 | 0.000 | .. | 0.003 | 0.001 | 0.000 | 0.000 |
Quantity | .. | 0.000 | 0.000 | .. | 0.001 | 0.000 | 0.000 | 0.000 |
Price | .. | 0.000 | 0.330 | .. | 0.000 | 0.011 | 0.000 | 0.000 |
Quarterly average for the Q1 2010 – Q3 2019 pre-tariff period | ||||||||
US | ||||||||
Value | 0.17 | 6.4 | 4.7 | 319.3 | 2.42 | 1.48 | 8.8 | 5.9 |
Quantity | 0.004 | 6.4 | 4.7 | 319.3 | 2.42 | 1.48 | 8.8 | 5.9 |
Price | 39.17 | 6.4 | 4.7 | 319.3 | 2.42 | 1.48 | 8.8 | 5.9 |
Synthetic control predictor averages | ||||||||
Value | 0.17 | 3.5 | 4.7 | .. | 2.53 | 45.57 | 9.9 | 4.9 |
Quantity | 0.004 | 3.9 | 4.7 | .. | 2.24 | 267.11 | 8.8 | 6.8 |
Price | 38.69 | 4.7 | 4.7 | .. | 2.18 | 21.99 | 9.8 | 5 |
Synthetic control weights (excl. lagged dep. vars. and/or monthly dummy) | ||||||||
Value | .. | 0.000 | 0.000 | .. | 0.000 | 0.000 | 0.000 | 0.000 |
Quantity | .. | 0.000 | 0.000 | .. | 0.000 | 0.000 | 0.787 | 0.000 |
Price | .. | 0.004 | 0.000 | .. | 0.000 | 0.033 | 0.000 | 0.000 |
(a) Export value is measured in £ per capita, export quantity is measured in litres of pure alcohol per capita, price is measured in £/LPA. (b) Population is not a predictor in itself – instead, it was used to convert export value or quantity and private final consumption into per-capita values. These variables were subsequently logged.
Contact
Email: agric.stats@gov.scot
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