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Import Demand Estimation and the Generalized Composite Commodity Theorem

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  • Asche, Frank
  • Guttormsen, Atle G.
  • Kristofersson, Dadi
  • Roheim, Cathy A.

Abstract

A 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.

Suggested Citation

  • Asche, Frank & Guttormsen, Atle G. & Kristofersson, Dadi & Roheim, Cathy A., 2005. "Import Demand Estimation and the Generalized Composite Commodity Theorem," 2005 Annual meeting, July 24-27, Providence, RI 19432, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea05:19432
    DOI: 10.22004/ag.econ.19432
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    References listed on IDEAS

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    Cited by:

    1. Wang, Xiaojin & Reed, Michael, 2013. "Estimation of Import Demand for Fishery Products in the U.S. Using the Source-Differentiated AIDS Model," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150207, Agricultural and Applied Economics Association.

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