Estimates and Determinants of Armington Elasticities for the U.S. Food Industry
-
Elena Lopez
Elena Lopez is a retired Associate Professor at the University of Alcalá, in Madrid, Spain. She received a BA in Economics from the Universidad Autonóma of Madrid (Spain), an MS from The Ohio State University and a Ph.D. from the University of Florida. She has published articles in a variety of scholarly journals on issues of international trade, demand theory and industrial organization.
und
Emilio Pagoulatos
Emilio Pagoulatos is an Emeritus Professor at the Department of Agricultural and Resource Economics at the University of Connecticut. His academic training includes a Doctorate in Economics from the University of Rome and a Ph.D. in Economics from Iowa State University. He has been a Professor at the University of Missouri, the University of Florida, and the University of Nebraska and his research is concentrated in the areas of international agricultural trade and the industrial organization and trade of the food system.
Abstract
This paper provides estimates of elasticities of substitution between domestic and imported goods for 40 4-digit S.I.C. food manufacturing industries and explains the inter-industry differences among these coefficients in terms of industry sectoral characteristics. The results show that there is a wide range of variation among such elasticities and that the intensity of each industry’s percentage of output sold to final consumers, foreign direct investment, expenditures on advertising and the existence of import quotas affect the degree of substitutability between domestic and foreign goods in the face of a relative price change.
Article Notes
This article was originally published 2002 in the Journal of Industry, Competition and Trade, Vol. 2/3, 247–258.
About the authors
Elena Lopez is a retired Associate Professor at the University of Alcalá, in Madrid, Spain. She received a BA in Economics from the Universidad Autonóma of Madrid (Spain), an MS from The Ohio State University and a Ph.D. from the University of Florida. She has published articles in a variety of scholarly journals on issues of international trade, demand theory and industrial organization.
Emilio Pagoulatos is an Emeritus Professor at the Department of Agricultural and Resource Economics at the University of Connecticut. His academic training includes a Doctorate in Economics from the University of Rome and a Ph.D. in Economics from Iowa State University. He has been a Professor at the University of Missouri, the University of Florida, and the University of Nebraska and his research is concentrated in the areas of international agricultural trade and the industrial organization and trade of the food system.
Acknowledgements
The authors wish to express their gratitude to Ibrahima Hathie for providing them with some of the data needed for this study and to Professor Rigoberto López for both data and, in particular, for his helpful comments. Elena Lopez gratefully acknowledges financial support for her research from the Catedras del Banco Santander Central Hispano-Universwidad de Alcalá.
References
Abrego, L., and J. Whalley. (2000).Demand Side Considerations and the Trade and wages DebateNBER Working Paper 1–137674.10.3386/w7674Suche in Google Scholar
Armington, P.S. 1969. “A Theory of Demand for Products Distinguished by Place of Production.” International Monetary Fund Staff Papers 16 (1):159–178.10.2307/3866403Suche in Google Scholar
Bartelsman, E.J., and W. Gray, “The NBER Manufacturring Productivity Database,” Natural Bureau of Economic Research, Technical Working Paper 205, 1996.10.3386/t0205Suche in Google Scholar
Blonigen, B.A., and W.W. Wilson. 1999. “Explaining Armington: What Determines Substitutability between Home and Foreign Goods?.” Canadian Journal of Economics 32 (1):1–21.10.2307/136392Suche in Google Scholar
Brenton, P.A., and L.A. Winters. 1993. “Voluntary Export Restraints and Rationing U.K. Leather, Footwear Imports from Eastern Europe.” Journal of International Economics 34:289–308.10.1016/0022-1996(93)90051-XSuche in Google Scholar
Brown, D.K., and R.M. Stern. 1987. “A Modeling Perspective.” In Perspectives on a US-Canadian Free Trade, eds Agreement, D.K. Stern, P.H. Trezise and J. Whalley. Washington DC: Brookings Institution.Suche in Google Scholar
Buse, A. 1973. “Goodness of Fit in Generalized Least Squares Estimation.” American Statistician 27:106–108.10.1080/00031305.1973.10479003Suche in Google Scholar
Connor, J.M., “Patterns of Foreign Investment in the 50 States: Focus on the Food System,” Purdue University, Station Bulletin, SB-685, 1994.Suche in Google Scholar
Corado, C., and J. DeMelo. 1986. “An Ex-Ante Model for Estimating the Impact on Trade Flows of a Country’s Joining a Custom’s Union.” Journal of Development Economics 24 (1):153–166.10.1016/0304-3878(86)90151-3Suche in Google Scholar
DeMelo, J., and S. Robinson. 1989. “Product Differentiation and the Treatment of Foreign Trade in Computable General Equilibrium Models of Small Economies.” Journal of International Economics 27:47–67.10.1016/0022-1996(89)90077-9Suche in Google Scholar
Feenstra, R.C. 1994. “New Product Varieties and the Measurement of International Prices.” American Economic Review 48 (1):157–177.Suche in Google Scholar
Hamilton, R., and J. Whalley. 1985. “Geographically Discriminatory Trade Arrangements.” Review of Economic and Statistics 67:446–452.10.2307/1925973Suche in Google Scholar
Kapuscinski, C., and P. Warr. 1999. “Estimation of Armington Elasticities: An Application to the Philippines.” Economic Modelling 16:257–278.10.1016/S0264-9993(98)00042-XSuche in Google Scholar
Lachler, U. 1985. “The Elasticity of Substitution between Imported and Domestically Produced Goods in Germany.” Weltwirtschaftliches Archiv 121 (1):74–95.10.1007/BF02705841Suche in Google Scholar
Markusen, J.R., and A.J. Venables. 1998. “Multinational Firms and the New Trade Theory.” Journal of International Economics 46:183–206.10.1016/S0022-1996(97)00052-4Suche in Google Scholar
McCallum, J. 1995. “National Borders Matter: Canada—U.S. Regional Trade Patterns.” The American Economic Review 85 (3):615–623.Suche in Google Scholar
Mutti, J. 1977. “The Specification of Demand Equations for Imports and Domestic Substitutes.” Southern Economic Journal 44 (1):68–73.10.2307/1057300Suche in Google Scholar
Reinert, K., and D.W. Roland-Holst. 1992. “Armington Elasticities for United States Manufacturing Sectors.” Journal of Policy Modeling 14 (5):631–639.10.1016/0161-8938(92)90033-9Suche in Google Scholar
Reinert, K., and C. Shiells, “Trade Substitution Elasticities for Analysis of a North America Trade Area,” Research Division Working Paper No. 91-01-B, Office of Economics, US International Trade Commission, 1991.Suche in Google Scholar
Richardson, J.D. 1973. “Beyond (But Back To?) the Elasticity of Substitution in International Trade.” European Economic Review 4 (4):381–392.10.1016/0014-2921(73)90022-6Suche in Google Scholar
Sawyer, W.C., and R.L. Sprinkle. 1989. “Alternative Empirical Estimates of Trade Creation and Trade Diversion: A Comparison of the Baldwin-Murray and Verdoon Models.” Weltwirtschaftliches Archiv 125 (1):61–73.10.1007/BF02707519Suche in Google Scholar
Saxonhouse, G.R. 1977. “Regressions from Samples Having Different Characteristics.” Review of Economics and Statistics 59:234–237.10.2307/1928822Suche in Google Scholar
Shiells, C.R., R. Stern, and A.V. Deardorff. 1986. “Estimates of the Elasticities of Substitution between Imports and Home Goods for the United States.” Weltwirtschaftliches Archiv 122 (3):497–519.10.1007/BF02707376Suche in Google Scholar
Sutton, J. 1991. Sunk Costs and Market Structure, Price Competition, Advertising, and the Evolution of Concentration. Cambridge, MA: The MIT Press.Suche in Google Scholar
Trefler, D. 1995. “The Case of Missing Trade and Other Mysteries.” American Economic Review 85:1029–1046.10.1257/000282802760015829Suche in Google Scholar
U.S. Department of Agriculture, xxxx. E.R.S. Foreign Agricultural Trade of the U.S. (various issues).Suche in Google Scholar
U.S. Department of Commerce, Bureau of Economic Analysis, The 1982 Benchmark Input-Output Accounts of the United States, 1991.Suche in Google Scholar
Wei, S., Intra-National versus International Trade: How Stubborn are Nations in Global Integration? Working Paper 5531, NBER, 1996.10.3386/w5531Suche in Google Scholar
Winters, L.A. 1981. “Price Adjustment and Market Structure; A Comment.” Economic Journal 91:1026–1030.10.2307/2232510Suche in Google Scholar
Winters, L.A. 1984. “Separability and the Specification of Foreign Trade Functions.” Journal of International Economics 17 (3/4):239–263.10.1016/0022-1996(84)90022-9Suche in Google Scholar
© 2003 Kluwer Academic Publishers
Artikel in diesem Heft
- Introduction to the Special Issue in Honor of Professor Emilio Pagoulatos
- Reprinted Articles
- What Determines the Elasticity of Industry Demand?
- Estimates and Determinants of Armington Elasticities for the U.S. Food Industry
- Articles
- A Re-Examination of Multistage Economies in Hog Farming
- Are Online and Offline Advertising Substitutes or Complements? Evidence from U.S. Food Industries
- Asymmetric Trade Costs: Agricultural Trade among Developing and Developed Countries
Artikel in diesem Heft
- Introduction to the Special Issue in Honor of Professor Emilio Pagoulatos
- Reprinted Articles
- What Determines the Elasticity of Industry Demand?
- Estimates and Determinants of Armington Elasticities for the U.S. Food Industry
- Articles
- A Re-Examination of Multistage Economies in Hog Farming
- Are Online and Offline Advertising Substitutes or Complements? Evidence from U.S. Food Industries
- Asymmetric Trade Costs: Agricultural Trade among Developing and Developed Countries
