Estimation of Armington elasticities: an application to the Philippines

The elasticities of substitution between imported and domestically produced goods — Armington elasticities — are estimated in this paper for the Philippines. The estimated elasticities are intended for use in a large, empirically based computable general equilibrium model of the Philippine economy....

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Bibliographic Details
Published in:Economic modelling 1999-04, Vol.16 (2), p.257-278
Main Authors: Kapuscinski, Cezary A., Warr, Peter G.
Format: Article
Language:English
Subjects:
Applied general equilibrium models
Armington elasticities
Cointegrating models
Cointegration analysis
Computable General Equilibrium models
Developing countries
Economic models
Elasticity of demand
Elasticity of substitution
Empirical research
Estimating techniques
International trade
LDCs
Philippines
Price elasticity
Studies
Substitution products
The Philippines
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Summary:The elasticities of substitution between imported and domestically produced goods — Armington elasticities — are estimated in this paper for the Philippines. The estimated elasticities are intended for use in a large, empirically based computable general equilibrium model of the Philippine economy. Armington elasticities are known to be important for the properties of these models but are seldom estimated empirically. The results of this paper suggest that estimation is possible for developing countries, like the Philippines, for which economic data are generally considered poor, provided appropriate account is taken of the dynamic properties of the data.
ISSN:0264-9993
1873-6122
DOI:10.1016/S0264-9993(98)00042-X