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Estimation of International Demand Behaviour for Use with Input-Output Based Data

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  • Jeffrey Reimer
  • Thomas Hertel

Abstract

The making of projections often requires an economy-wide perspective, and the estimation of consumer demands at the international level. In this paper, an implicit, directly additive demand system (AIDADS) is estimated using cross- country data on consumer expenditures from two different sources: the International Comparison Programme (ICP), and the Global Trade Analysis Project (GTAP). The two data sets are found to produce results that are quite consistent despite their differing origins, and the fact that the former is based on consumer goods that embody wholesale/retail margins, while margin demands are treated separately in GTAP. Given the similarity of the results, the estimation based on GTAP data is favoured for economy-wide projection purposes because it can be readily matched to input-output based production and trade data. An additional benefit of the GTAP-based estimates is that they provide direct evidence concerning how aggregate margin expenditures vary with per capita income.

Suggested Citation

  • Jeffrey Reimer & Thomas Hertel, 2004. "Estimation of International Demand Behaviour for Use with Input-Output Based Data," Economic Systems Research, Taylor & Francis Journals, vol. 16(4), pages 347-366.
  • Handle: RePEc:taf:ecsysr:v:16:y:2004:i:4:p:347-366
    DOI: 10.1080/0953531042000304245
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    Citations

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    Cited by:

    1. de Boer, P.M.C., 2009. "Modeling household behavior in a CGE model: linear expenditure system or indirect addilog?," Econometric Institute Research Papers EI 2009-16, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    2. Thomas W. Hertel & Roman Keeney & Maros Ivanic & L. Alan Winters, 2007. "Distributional effects of WTO agricultural reforms in rich and poor countries," Economic Policy, CEPR;CES;MSH, vol. 22, pages 289-337, April.
    3. Reimer, Jeffrey J. & Weerasooriya, Senal & West, Tyler T., 2015. "How Does the Supplemental Nutrition Assistance Program Affect the U.S. Economy?," Agricultural and Resource Economics Review, Cambridge University Press, vol. 44(03), pages 233-252, December.
    4. Muhammad, Andrew & Meade, Birgit Gisela Saager, 2011. "International Evidence on Food Consumption Patterns: An Update Using 2005 International Comparison Program Data," Technical Bulletins 120252, United States Department of Agriculture, Economic Research Service.
    5. Thomas W. Hertel & Jevgenijs Steinbuks & Wallace E. Tyner, 2016. "What Is the Social Value of Second Generation Biofuels?," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 38(4), pages 599-617.
    6. Thomas Hertel & David Hummels & Terrie L. Walmsley, 2014. "The vulnerability of the Asian supply chain to localized disasters," Chapters,in: Asia and Global Production Networks, chapter 3, pages 81-111 Edward Elgar Publishing.
    7. Hertel, Thomas, 2013. "Global Applied General Equilibrium Analysis Using the Global Trade Analysis Project Framework," Handbook of Computable General Equilibrium Modeling, Elsevier.
    8. repec:gta:jnlgea:v:2:y:2017:i:1:p:166-214 is not listed on IDEAS
    9. Regmi, Anita & Seale, James L., Jr., 2010. "Cross-Price Elasticities of Demand Across 114 Countries," Technical Bulletins 59870, United States Department of Agriculture, Economic Research Service.
    10. Jeffrey J. Reimer & Thomas W. Hertel, 2010. "Nonhomothetic Preferences and International Trade," Review of International Economics, Wiley Blackwell, vol. 18(2), pages 408-425, May.
    11. Paul de Boer & Bjarne S. Jensen, 2005. "The Expenditure System of CDES Indirect Utility Functions," DEGIT Conference Papers c010_036, DEGIT, Dynamics, Economic Growth, and International Trade.
    12. Chen, Y.-H. Henry & Paltsev, Sergey & Reilly, John M. & Morris, Jennifer F. & Babiker, Mustafa H., 2016. "Long-term economic modeling for climate change assessment," Economic Modelling, Elsevier, vol. 52(PB), pages 867-883.
    13. Misak Avetisyan & Thomas Hertel & Gregory Sampson, 2014. "Is Local Food More Environmentally Friendly? The GHG Emissions Impacts of Consuming Imported versus Domestically Produced Food," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(3), pages 415-462, July.
    14. Paul de Boer, 2010. "Modeling Household Behavior in a CGE Model: Linear Expenditure System or Indirect Addilog?," DEGIT Conference Papers c015_059, DEGIT, Dynamics, Economic Growth, and International Trade.
    15. repec:ags:afjare:225656 is not listed on IDEAS
    16. Paul de Boer & Richard Paap, 2009. "Testing non-nested demand relations: linear expenditure system versus indirect addilog," Statistica Neerlandica, Netherlands Society for Statistics and Operations Research, vol. 63(3), pages 368-384.
    17. Reimer, Jeffrey J., 2011. "The domestic content of imports and the foreign content of exports," International Review of Economics & Finance, Elsevier, vol. 20(2), pages 173-184, April.
    18. Cai, Yongyang & Golub, Alla A. & Hertel, Thomas W., 2016. "Developing Long-run Agricultural R&D Policy in the Face of Uncertain Economic Growth," 2017 Allied Social Science Association (ASSA) Annual Meeting, January 6-8, 2017, Chicago, Illinois 250111, Agricultural and Applied Economics Association.
    19. West, Tyler T. & Reimer, Jeffrey J., 2013. "Household and Intersectoral Effects of Reduced SNAP Expenditures: A Computable General Equilibrium Analysis," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150410, Agricultural and Applied Economics Association.
    20. Leahy, Eimear & Lyons, Seán & Tol, Richard S. J., 2010. "National Determinants of Vegetarianism," Papers WP341, Economic and Social Research Institute (ESRI).
    21. de Boer, P.M.C. & Missaglia, M., 2005. "Introducing the indirect addilog system in a computable general equilibrium model: a case study for Palestine," Econometric Institute Research Papers EI 2005-25, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.

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