Whither Armington Trade Models?

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

doi:10.2307/1242349

Cited by 142 publications

(72 citation statements)

References 15 publications

(2 reference statements)

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“…Using a loglinear demand relationship between two countries' relative exports and relative prices, he found that relative export prices plus ocean freight rates were important in allocating imports between competing exporting countries. Alston et al (1990) compared Armington, double-log, and almost ideal demand models for wheat and cotton imports and stressed the need to test whether demand restrictions are appropriate. The Armington model, which can be nested within the more general double-log model by restricting substitution effects, was comprehensively rejected.…”

Section: Introductionmentioning

confidence: 99%

Economic substitution for US wheat food use by class*

Marsh

2005

Aus J Agri & Res Econ

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Wheat for food use is conceptualised as an input into flour production and demand is derived from an industry profit function to quantify price responsiveness and economic substitutability across wheat classes. Price and substitution elasticities are estimated for hard red winter, hard red spring, soft red wheat, soft white winter and durum wheat. In general, hard red winter and spring wheat varieties are much more responsive to their own price than are soft wheat varieties and durum wheat. Substitution elasticities indicate that hard red winter and hard red spring wheat are economic substitutes for milling purposes.

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Section: Introductionmentioning

confidence: 99%

Economic substitution for US wheat food use by class*

Marsh

2005

Aus J Agri & Res Econ

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“…An early and notable example is the analysis of the international wheat market by Grennes et al (1978). Also, see Johnson (1971), Alston (1986), Alston et al (1990), MacLaren (1990), Davis and Kruse (1993), and Sumner et al (1994) for discussions of the Armington model, specific studies, and related econometric issues. expenditure, and the expansion elasticities of supply, to be equal to one for both…”

Section: Elasticity Decompositions Under the Assumption Of Weak Separmentioning

confidence: 99%

Taxes and quality: A market–level analysis

James

Alston

2002

Aus J Agri & Res Econ

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A conventional assumption of product homogeneity when the commodity of interest is actually heterogeneous will lead to errors in an analysis of the incidence of policies, such as taxes. In this article, an equilibrium displacement model is used to derive analytical solutions for price, quantity, and quality effects of ad valorem and per unit taxes. The results show how parameters determine the effects of tax policies on quality. The potential for tax-induced distortions in quality, and the distributive consequences of those distortions, are illustrated in a case study of the market for Australian wine.

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“…The separability restriction is frequently found to be inappropriate and, if so, would generate omittedvariable bias that leads to an understatement of the price elasticities. Alston, Carter, Green, and Pick (1990), for example, show that AIDS dominates the Armington approach in modern commodity markets (including cotton) and that the Armington understates demand elasticities by about 50 percent in comparison to the AIDS estimation (and estimates of elasticities in singleequation log linear specifications are understated by an even greater margin).…”

Section: A Estimation Frameworkmentioning

confidence: 99%

The Optimal Tax on Antebellum U.S. Cotton Exports

Irwin¹

2001

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The United States produced about 80 percent of the world's cotton in the decades prior to the Civil War. How much monopoly power did the United States possess in the world cotton market and what would have been the effect of an optimal export tax? This paper estimates the elasticity of foreign demand for U.S. cotton exports and uses the elasticity in a simple partial equilibrium model to calculate the optimal export tax and its effect on prices, trade, and welfare. The results indicate that the export demand elasticity for U.S. cotton was about -1.7 and that the optimal export tax of about 50 percent would have raised U.S. welfare by about $6 million, about 0.1 percent of U.S. GDP or about 0.5 percent of the South's GDP.

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Whither Armington Trade Models?

Cited by 142 publications

References 15 publications

Economic substitution for US wheat food use by class*

Economic substitution for US wheat food use by class*

Taxes and quality: A market–level analysis

The Optimal Tax on Antebellum U.S. Cotton Exports

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