Estimating Price Elasticities of Food Trade Functions: How Relevant is the CES-based Gravity Approach?
AbstractThe main objective of this article is to examine econometric estimates of price elasticities of food trade functions. We investigate the relevance of the prominent gravity approach. This approach is based on the assumptions of symmetric, monotone, homothetic, Constant Elasticity of Substitution (CES) preferences. We test all these assumptions using intra-European trade in cheese. In general, the assumptions made on preferences by the gravity approach are not supported by our dataset. The bias induced in the estimated price elasticities is ambiguous. Copyright (c) 2009 The Authors. Journal compilation (c) 2009 The Agricultural Economics Society.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Journal of Agricultural Economics.
Volume (Year): 60 (2009)
Issue (Month): 2 ()
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0021-857X
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- Novy, Dennis, 2010.
"International Trade without CES: Estimating Translog Gravity,"
CAGE Online Working Paper Series
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- Novy, Dennis, 2013. "International trade without CES: Estimating translog gravity," Journal of International Economics, Elsevier, vol. 89(2), pages 271-282.
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- Novy, Dennis, 2012. "International Trade without CES: Estimating Translog Gravity," CAGE Online Working Paper Series 101, Competitive Advantage in the Global Economy (CAGE).
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- Dennis Novy, 2010. "International Trade without CES: Estimating Translog Gravity," CESifo Working Paper Series 3008, CESifo Group Munich.
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