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Import demand elasticities based on quantity data: Theory and evidence

Ferguson, Shon and Smith, Aaron (2022). Import demand elasticities based on quantity data: Theory and evidence. Canadian Journal Of Economics/Revue canadienne d'économique. 55 :2 , 1027-1056
[Research article]

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Correct estimates of import demand elasticities are essential for measuring the gains from trade and predicting the impact of trade policies. We show that estimates of import demand elasticities hinge critically on whether they are derived using trade quantities or trade values, and this difference is due to properties of the estimators. Using partial identification methods, we show theoretically that the upper bound on the set of plausible estimates is lower when using traded quantities, compared to the standard approach using trade values. Our theoretical predictions are confirmed using detailed product-level data on US imports for the years 1993 to 2006. Our proposed method using traded quantities leads to smaller point estimates of the import demand elasticities for many goods and imply larger gains from trade compared to estimates based on trade values.

Authors/Creators:Ferguson, Shon and Smith, Aaron
Title:Import demand elasticities based on quantity data: Theory and evidence
Series Name/Journal:Canadian Journal Of Economics/Revue canadienne d'économique
Year of publishing :2022
Page range:1027-1056
Number of Pages:30
Publication Type:Research article
Article category:Scientific peer reviewed
Version:Published version
Copyright:Creative Commons: Attribution 4.0
Full Text Status:Public
Subjects:(A) Swedish standard research categories 2011 > 5 Social Sciences > 502 Economics and Business > Economics
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Additional ID:
Type of IDID
Web of Science (WoS)000800057400001
ID Code:28429
Faculty:NJ - Fakulteten för naturresurser och jordbruksvetenskap
Department:(NL, NJ) > Dept. of Economics
Deposited By: SLUpub Connector
Deposited On:12 Jul 2022 07:25
Metadata Last Modified:12 Jul 2022 07:34

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