These are tariffs, but also non-tariff barriers, such as technical regulations, product standards or licensing. These may include, for instance, taste differences that are not explained by the variables used to proxy for cultural and linguistic differences. The unexplained component is considerably higher for trade costs in services than for trade costs in goods, which may also reflect poorer measures for policy barriers in trade in services. For a detailed exposition of the methodology used to estimate the decomposition, see Appendix C.1.