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Estimates of the elasticity of substitution between imported and domestically produced goods classified at the input-output level of aggregation

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Chris M. Alaouze
Abstract

This empirical study of Armington elasticities between Australian domestically produced commodities and imported commodities of the same name follows directly from Alaouze, Marsden and Zeitsch [AMZ] (1977) (see Impact Project Working Paper O-11, available from this web site). In the present study the AMZ models were estimated from data constructed at the input-output [IO] (rather than the four-digit ASIC) level of aggregation. The major results obtained here are in basic agreement with those in AMZ. However, estimated substitution elasticities at this higher level of aggregation tended to be lower than those obtained in AMZ. Nevertheless, the elasticities of substitution estimated here at the IO aggregation level fell within the range of the estimates for any given IO category's ASIC components in those cases where substitution elasticities for two or more ASICs belonging to the same IO category were estimated in the AMZ study.

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Paper provided by Monash University, Centre of Policy Studies/IMPACT Centre in its series Centre of Policy Studies/IMPACT Centre Working Papers with number o-13.

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Date of creation: Oct 1977
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Handle: RePEc:cop:wpaper:o-13

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  1. Gregory, R G, 1971. "United States Imports and Internal Pressure of Demand: 1948-68," American Economic Review, American Economic Association, vol. 61(1), pages 28-47, March. [Downloadable!] (restricted)
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  1. Maureen T. Rimmer & Alan A. Powell, 1992. "An Implicitly Directly Additive Demand System: Estimates for Australia," Centre of Policy Studies/IMPACT Centre Working Papers op-73, Monash University, Centre of Policy Studies/IMPACT Centre. [Downloadable!]
  2. Thomas Hertel & David Hummels & Maros Ivanic & Roman Keeney, 2004. "How Confident Can We Be in CGE-Based Assessments of Free Trade Agreements?," NBER Working Papers 10477, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Maureen T. Rimmer & Alan A. Powell, 1992. "Demand Patterns Across the Development Spectrum: Estimates for the AIDADS System," Centre of Policy Studies/IMPACT Centre Working Papers op-75, Monash University, Centre of Policy Studies/IMPACT Centre. [Downloadable!]
  4. González, Manuel & Wong, Sara, 2004. "Elasticidades de Sustitución de Importaciones para Ecuador," MPRA Paper 306, University Library of Munich, Germany, revised May 2005. [Downloadable!]
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