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Armington elasticities for energy policy modeling: Evidence from four European countries

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  • Welsch, Heinz

Abstract

Elasticities of substitution among imports and competing domestic production (Armington elasticities) play an important role in computable general equilibrium (CGE) assessments of energy and climate policy. This paper provides estimates of Armington elasticities for 15 commodity groups in four European countries. Since Armington elasticities are found to be rather low on average, researchers may want to reconsider the device of using high values of Armington elasticities in CGE models to avoid unrealistic competitiveness effects or emission leakage rates associated with energy or carbon taxes or other forms of energy-related regulation. Estimated elasticities tend to be higher in the case of machinery and other investment goods than in the case of primary products, ores and chemicals, as well as consumer goods.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 30 (2008)
Issue (Month): 5 (September)
Pages: 2252-2264

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Handle: RePEc:eee:eneeco:v:30:y:2008:i:5:p:2252-2264

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Cited by:
  1. repec:hal:ciredw:hal-00866444 is not listed on IDEAS
  2. Valeria Costantini & Alessio D'Amato & Chiara Martini & Maria Cristina Tommasino & Edilio Valentini & Mariangela Zoli, 2011. "Taxing international emissions trading," Departmental Working Papers of Economics - University 'Roma Tre' 0143, Department of Economics - University Roma Tre.
  3. Monjon, Stéphanie & Quirion, Philippe, 2011. "Addressing leakage in the EU ETS: Border adjustment or output-based allocation?," Ecological Economics, Elsevier, vol. 70(11), pages 1957-1971, September.
  4. Németh, Gabriella & Szabó, László & Ciscar, Juan-Carlos, 2011. "Estimation of Armington elasticities in a CGE economy-energy-environment model for Europe," Economic Modelling, Elsevier, vol. 28(4), pages 1993-1999, July.
  5. repec:hal:wpaper:hal-00866444 is not listed on IDEAS
  6. Garau, Giorgio & Lecca, Patrizio & Mandras, Giovanni, 2013. "The impact of population ageing on energy use: Evidence from Italy," Economic Modelling, Elsevier, vol. 35(C), pages 970-980.
  7. Alexandre Sauquet & Franck Lecocq & Philippe Delacote & Sylvain Caurla & Ahmed Barkaoui & Serge Garcia, 2011. "Estimating Armington elasticities for sawnwood and application to the French Forest Sector Model," Working Papers - Cahiers du LEF 2011-02, Laboratoire d'Economie Forestiere, AgroParisTech-INRA.
  8. Beckman, Jayson & Hertel, Thomas & Tyner, Wallace, 2011. "Validating energy-oriented CGE models," Energy Economics, Elsevier, vol. 33(5), pages 799-806, September.
  9. Dandres, Thomas & Gaudreault, Caroline & Tirado-Seco, Pablo & Samson, Réjean, 2012. "Macroanalysis of the economic and environmental impacts of a 2005–2025 European Union bioenergy policy using the GTAP model and life cycle assessment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(2), pages 1180-1192.
  10. Christoph Böhringer & André Müller, 2014. "Environmental Tax Reforms in Switzerland A Computable General Equilibrium Impact Analysis," Working Papers V-361-14, University of Oldenburg, Department of Economics, revised Jan 2014.
  11. Schubert, Stefanie & Schnabel, Reinhold, 2009. "Curing Germany's health care system by mandatory health premia?," Journal of Health Economics, Elsevier, vol. 28(5), pages 911-923, September.
  12. Christophe Heyndrickx & Natalia Tourdyeva & Victoria Alexeeva-Talebi, 2011. "The SUSTRUS model: a CGE model on regional level for sustainability policies in Russia," EcoMod2011 3144, EcoMod.
  13. Tim Callan & Sean Lyons & Sue Scott & Richard S. J. Tol & Stefano Verde, 2008. "The Distributional Implications of a Carbon Tax in Ireland," Papers WP250, Economic and Social Research Institute (ESRI).
  14. Alessandro Antimiani & Valeria Costantini & Chiara Martini & Luca Salvatici, 2011. "Cooperative and non-cooperative solutions to carbon leakage," Departmental Working Papers of Economics - University 'Roma Tre' 0136, Department of Economics - University Roma Tre.

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