Allowing for Group Effects When Estimating Import Demand for Source and Product Differentiated Goods
AbstractIn this study an import demand model (differential production model) is presented that is used in estimating the demand for source and product differentiated goods simultaneously. Unlike the traditional import demand models, this model can account for changes in relative group expenditures. Expenditure estimates differed when comparing the differential production model and Rotterdam model results. Results showed that if group revenue shares are relatively fixed, then the bias in expenditure estimates due to omitting group effects will be small when using traditional demand models such as the AIDS or Rotterdam models. As relative group shares significantly change and diverge the bias increases, particularly for imports representing a larger share of group expenditures.
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Bibliographic InfoPaper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida with number 6364.
Date of creation: 2008
Date of revision:
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Import demand; AIDS model; Rotterdam model; product differentiation; source differentiation; Demand and Price Analysis; International Relations/Trade; F17; Q17; Q11.;
Find related papers by JEL classification:
- F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
- Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
- Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
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- Beach, Charles M & MacKinnon, James G, 1979.
"Maximum Likelihood Estimation of Singular Equation Systems with Autoregressive Disturbances,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 20(2), pages 459-64, June.
- Charles M. Beach & James G. MacKinnon, 1977. "Maximum Likelihood Estimation of Singular Equation Systems with Autoregressive Disturbances," Working Papers 276, Queen's University, Department of Economics.
- Jose Alberto Molina, 1997. "Modelling the Spanish imports of vehicles using a source differentiated demand system," Applied Economics Letters, Taylor & Francis Journals, vol. 4(12), pages 751-755.
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