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Modeling international trade flows and market shares for agricultural commodities: a modified Armington procedure for rice

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  • Ito, Shoichi
  • Chen, Dean T.
  • Peterson, E. Wesley F.

Abstract

The Armington procedure (AP) has become increasingly popular in agricultural trade analyses. However, some arguments have arisen concerning the relevance of using the procedure for such analyses. This study examines the assumptions commonly made when using the Armington procedure and suggests modifications for agricultural trade analyses. Results from models utilizing rice‐trade data suggest that the assumptions of the single constant elasticity, in particular, may not be appropriate for analyzing agricultural trade. These results also suggest that, with proper modifications, the AP can be applied to agricultural trade. Further, results of a modified Armington procedure indicate that trade in rice exports is highly competitive and that changes in market shares of individual exporters are not independent of changes in budget expenditure allocated to imports.
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  • Ito, Shoichi & Chen, Dean T. & Peterson, E. Wesley F., 1990. "Modeling international trade flows and market shares for agricultural commodities: a modified Armington procedure for rice," Agricultural Economics, Blackwell, vol. 4(3-4), pages 315-333, December.
    • Handle: RePEc:eee:agecon:v:4:y:1990:i:3-4:p:315-333
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    Cited by:

    1. Femenia, Fabienne & Gohin, Alexandre, 2007. "Estimating price elasticities of food trade functions: How relevant is the gravity approach?," Working Papers 7211, TRADEAG - Agricultural Trade Agreements.
    2. Jaouad, Mohamed, 1994. "An agricultural policy and trade model for Morocco," ISU General Staff Papers 1994010108000011483, Iowa State University, Department of Economics.
    3. Hansen, James Mark, 2000. "Agricultural and trade policy reform in Mexico: PROCAMPO, NAFTA, and pre-GATT," ISU General Staff Papers 2000010108000014902, Iowa State University, Department of Economics.
    4. Ito, Shoichi & Rosegrant, Mark W. & Agcaoili-Sombilla, Mercedita C., 1995. "Quality-equivalent and cost adjusted measurement of international competitiveness in Japanese rice markets:," EPTD discussion papers 12, International Food Policy Research Institute (IFPRI).
    5. Haq, Zahoor Ul & Ishaq, Muhammad, 2005. "An Armington Assumption Approach To Model International Trade Flow And Market Share For Apples In Canada," Bangladesh Journal of Agricultural Economics, Bangladesh Agricultural University, vol. 28(1-2), pages 1-16, December.
    6. Marilyne Huchet‐Bourdon & Esmaeil Pishbahar, 2009. "Armington Elasticities and Tariff Regime: An Application to European Union Rice Imports," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(3), pages 586-603, September.
    7. Alexandre Gohin & Fabienne Féménia, 2009. "Estimating Price Elasticities of Food Trade Functions: How Relevant is the CES‐based Gravity Approach?," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(2), pages 253-272, June.
    8. Karine Daniel, 2007. "Ouverture des marchés et localisation des productions agricoles Market openness and location of agricultural activities," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 55(3), pages 327-347, September.

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