Import Demand Estimation and the Generalized Composite Commodity Theorem
AbstractA frequently encountered problem in import demand estimation is how to account for competition between imports and domestic production. Traditionally, use of the Armington model has been a way to handle this problem. This is a disaggregate model which distinguishes commodities by country of origin with import demand determined in a separable two-step procedure. The model appears frequently in analysis of international agricultural markets. However, the Armington model relies on a set of weak separability assumptions, which several authors have shown to be highly questionable. In this paper, a new aggregation theorem, the Generalized Composite Commodity Theorem (GCCT), is applied to test whether imports can be treated as a separate group. An advantage with the GCCT is that only import data is required to conduct the test. The application is to the imports of swordfish to the U.S. with implications for U.S. and international swordfish management policies.
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Bibliographic InfoPaper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2005 Annual meeting, July 24-27, Providence, RI with number 19432.
Date of creation: 2005
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Armington; separability; GCCT; demand system; sword fish; International Relations/Trade; F18; Q11; Q22;
Find related papers by JEL classification:
- F18 - International Economics - - Trade - - - Trade and Environment
- Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
- Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
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