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Estimates of Armington parameters for a landlocked economy

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  • Nganou, Jean-Pascal

Abstract

One of the most debated issues in the Computable General Equilibrium (CGE) literature concerns the validity of the key behavioral parameters used in the calibration process. CGE modelers seldom estimate those parameters, preferring to borrow from the handful of estimates available in the literature. The lack of data is often cited as a reason for this type of modus operandi (technique). Estimating key parameters is very crucial since CGE results are quite sensitive to parameter specification. This paper proposes a new and robust econometric technique, the Generalized Maximum Entropy (GME), to estimate Armington elasticities for selected commodities. All the parameters estimated are intended for use in a Lesotho CGE model.

Suggested Citation

  • Nganou, Jean-Pascal, 2005. "Estimates of Armington parameters for a landlocked economy," MPRA Paper 31459, University Library of Munich, Germany, revised 10 Aug 2008.
  • Handle: RePEc:pra:mprapa:31459
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    File URL: https://mpra.ub.uni-muenchen.de/31459/1/MPRA_paper_31459.pdf
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    References listed on IDEAS

    as
    1. Golan, Amos & Judge, George G. & Miller, Douglas, 1996. "Maximum Entropy Econometrics," Staff General Research Papers Archive 1488, Iowa State University, Department of Economics.
    2. Arndt, Channing & Robinson, Sherman & Tarp, Finn, 2002. "Parameter estimation for a computable general equilibrium model: a maximum entropy approach," Economic Modelling, Elsevier, vol. 19(3), pages 375-398, May.
    3. Iain Fraser, 2000. "An application of maximum entropy estimation: the demand for meat in the United Kingdom," Applied Economics, Taylor & Francis Journals, vol. 32(1), pages 45-59.
    4. Clinton R. Shiells & Kenneth A. Reinert, 1993. "Armington Models and Terms-of-Trade Effects: Some Econometric Evidence for North America," Canadian Journal of Economics, Canadian Economics Association, vol. 26(2), pages 299-316, May.
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    More about this item

    Keywords

    CGE; Maximum Entropy (GME); Armington; Africa; Lesotho;

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics

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