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Two-Stage Agricultural Import Demand Models: Theory And Applications

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  • Carter, Colin
  • Green, Richard
  • Pick, Daniel

Abstract

The Armington trade model distinguishes commodities by country of origin and import demand is determined in a separable two-step procedure. The Armington framework has been applied to numerous international agricultural markets with the objective of modelling import demand. The purpose of this paper is to test the Armington assumptions of homotheticity and separability with data from the international wheat market. The empirical results overwhelmingly reject these assumptions. This has important implications for international trade modelling.
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Suggested Citation

  • Carter, Colin & Green, Richard & Pick, Daniel, 1988. "Two-Stage Agricultural Import Demand Models: Theory And Applications," Working Papers 225815, University of California, Davis, Department of Agricultural and Resource Economics.
    • Handle: RePEc:ags:ucdavw:225815
    DOI: 10.22004/ag.econ.225815
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    References listed on IDEAS

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    1. Blanciforti, Laura & Green, Richard, 1983. "An Almost Ideal Demand System Incorporating Habits: An Analysis of Expenditures on Food and Aggregate Commodity Groups," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 511-515, August.
    2. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
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    Cited by:

    1. Ito, Shoichi & Chen, Dean T. & F. Peterson, E. Wesley, 1989. "Modeling Trade Flows and Market Shares: A Modified Armington Procedure for Rice," Staff Reports 257923, Texas A&M University, Agricultural and Food Policy Center.
    2. Ito, Shoichi & Chen, Dean T. & F. Peterson, E. Wesley, 1989. "A Multi-ces and Non-Homothetic Approach for Agricultural Trade Analysis: A Modified Armington Procedure," Staff Reports 257925, Texas A&M University, Agricultural and Food Policy Center.

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