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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. 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(3), pages 233-252, December.
    2. Hertel, Thomas, 2013. "Global Applied General Equilibrium Analysis Using the Global Trade Analysis Project Framework," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 815-876, Elsevier.
    3. 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.
    4. Mun Ho & Wolfgang Britz & Ruth Delzeit & Florian Leblanc & Roberto Roson & Franziska Schuenemann & Matthias Weitzel, 2020. "Modelling Consumption and Constructing Long-Term Baselines in Final Demand," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 5(1), pages 63-108, June.
    5. 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.
    6. 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.
    7. repec:ags:afjare:225656 is not listed on IDEAS
    8. Britz, Wolfgang, 2021. "Estimating a global MAIDADS demand system considering demography, climate and norms," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 10(3), July.
    9. 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.
    10. 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 Sciences Association (ASSA) Annual Meeting, January 6-8, 2017, Chicago, Illinois 250111, Agricultural and Applied Economics Association.
    11. Russell Hillberry & David Hummels, 2021. "Tom Hertel’s Influence and Its Lessons about Academic Inquiry," World Scientific Book Chapters, in: Peter Dixon & Joseph Francois & Dominique van der Mensbrugghe (ed.), POLICY ANALYSIS AND MODELING OF THE GLOBAL ECONOMY A Festschrift Celebrating Thomas Hertel, chapter 2, pages 9-39, World Scientific Publishing Co. Pte. Ltd..
    12. 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.
    13. Leahy, Eimear & Lyons, Seán & Tol, Richard S. J., 2010. "National Determinants of Vegetarianism," Papers WP341, Economic and Social Research Institute (ESRI).
    14. Muhammad, Andrew & Meade, Birgit Gisela Saager & Regmi, Anita & Seale, James L., 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.
    15. 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.
    16. 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.
    17. Thomas W. Hertel & Roman Keeney & Maros Ivanic & L. Alan Winters, 2007. "Distributional effects of WTO agricultural reforms in rich and poor countries [‘Elasticities of substitution and factor supply in Canadian, Mexican, and US agriculture’]," Economic Policy, CEPR;CES;MSH, vol. 22(50), pages 290-337.
    18. Thomas Hertel & David Hummels & Terrie L. Walmsley, 2014. "The vulnerability of the Asian supply chain to localized disasters," Chapters, in: Benno Ferrarini & David Hummels (ed.), Asia and Global Production Networks, chapter 3, pages 81-111, Edward Elgar Publishing.
    19. Y-H Henry Chen, 2017. "The Calibration and Performance of a Non-homothetic CDE Demand System for CGE Models," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 2(1), pages 166-214, June.
    20. 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.
    21. 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.
    22. 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.
    23. Cai, Yongyang & Golub, Alla A. & Hertel, Thomas W. & Judd, Kenneth L., 2016. "Agricultural R&D Policy in the Face of Climate and Economic Uncertainty," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235981, Agricultural and Applied Economics Association.
    24. 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, August.
    25. Ivanic, Maros & Martin, Will, 2018. "Sectoral Productivity Growth and Poverty Reduction: National and Global Impacts," World Development, Elsevier, vol. 109(C), pages 429-439.

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