Econometric estimation of Armington import elasticities for regional CGE models of the Chicago and Illinois economies
AbstractOur current research program is concerned with developing regional and interregional computable general equilibrium models for Chicago and the Midwest respectively. One of the main concerns associated with regional CGE modeling is determination of the empirical parameters of models, particularly elasticities and share parameters. A common problem is the lack of appropriate regional data for econometric estimation. Consequently, it is important to identify key parameters that are likely to be important in determining quantitative results and prioritise these for estimation where appropriate data are available. In this paper we focus on estimating regional trade (import) substitution parameters, both because these will generally be important in analysis for regional economies, which tend to be more open than national economies, and also because one of the main areas of our current research is to model the pollution content of trade flows between regions and the impacts on pollution â€˜trade balancesâ€™ in response to changes in activity. While our work will eventually encompass the five Midwest states of Illinois, Indiana, Michigan, Ohio and Wisconsin, our first step in the process of parameter estimation for our intended suite of regional and interregional CGE models is to estimate commodity import elasticities for the Illinois economy (to be applied also to our single region Chicago model, in the absence of appropriate data for region-specific estimation at that level). We apply a model where we take account of market size and distance in estimating the substitutability between commodities produced in Illinois and other US states.
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Bibliographic InfoPaper provided by University of Strathclyde Business School, Department of Economics in its series Working Papers with number 0810.
Length: 22 pages
Date of creation: Oct 2008
Date of revision:
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general equilibrium model; regional modelling; import elasticity;
Other versions of this item:
- Ha, Soo Junga & Turner, Karen & Hewings, Geoffrey, 2008. "Econometric Estimation of Armington import elasticities for regional CGE models of the Chicago and Illinois economies," SIRE Discussion Papers 2008-37, Scottish Institute for Research in Economics (SIRE).
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
- F10 - International Economics - - Trade - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-12-01 (All new papers)
- NEP-CMP-2008-12-01 (Computational Economics)
- NEP-GEO-2008-12-01 (Economic Geography)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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