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Whither Armington Trade Models?

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  • Alston, Julian M.
  • Carter, Colin A.
  • Green, Richard
  • Pick, Daniel

Abstract

The Armington trade model distinguishes commodities by country of origin _and impo~t demand is determined in a separable two-step procedure. This framework has been applied to numerous international agricultural markets with the objective of ~odeling imp-ort demand. In addition, computable general ·- . - equilibrium (CGE) models commonly employ the Armington formulation in the trade linkage equatiops. The purpose of this paper is to test the 4rmington assumptions of -· homotheticity and separability with data from the international cotton and wheat markets. Both' parametric and nonparametric tests were performed and the e~pirical resμlts reject the Armingto~ assumptions. This has important implications for international trade.modeling an~ CGE modeling.'

Suggested Citation

  • Alston, Julian M. & Carter, Colin A. & Green, Richard & Pick, Daniel, 1989. "Whither Armington Trade Models?," 1989 Annual Meeting, July 30-August 2, Baton Rouge, Louisiana 270703, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea89:270703
    DOI: 10.22004/ag.econ.270703
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    6. Chalfant, James A & Alston, Julian M, 1988. "Accounting for Changes in Tastes," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 391-410, April.
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