Armington Elasticities for Brazil - 1986-2002: New Estimates

IPEA Discussion Paper No. 974

22 Pages Posted: 24 Apr 2003

See all articles by Ana Cristina de Souza Pedroso

Ana Cristina de Souza Pedroso

Institute of Applied Economic Research (IPEA)

Octavio Augusto Fontes Tourinho

PPGCE/FCE/UERJ - Univ. do Estado do Rio de Janeiro

Honorio Kume

Institute of Applied Economic Research (IPEA)

Date Written: September 2003

Abstract

The structure introduced by Armington (1969) has been used to analyze trade policy in partial and general equilibrium models. The Armington elasticities, the degree of substitution between domestic and import goods are known to be important, but are seldom estimated empirically. Therefore, we estimate them for 28 industrial sectors, based on the Brazilian Input-Output table over the period 1986-2000. Initially we discuss the construction of the data set and the treatment that was given to the relative prices, for taking into account the trade liberalization initiated in 1990. According to the dynamic properties of the data we estimate four different econometric models. 25 out of the 28 sectors had positive and significant Armington estimates that were significant at the ten-percent level. They range between 0,16 e 4,95, which reflects the different degree of substitutability between domestic and import goods in the Brazilian industry.

Note: Previously Entitled: Armington Elasticities for Brazil: 1986-2001

Keywords: Substitution elasticity, Armington model, Imports Trade

JEL Classification: F1

Suggested Citation

de Souza Pedroso, Ana Cristina and Tourinho, Octavio Augusto Fontes and Kume, Honorio, Armington Elasticities for Brazil - 1986-2002: New Estimates (September 2003). IPEA Discussion Paper No. 974, Available at SSRN: https://ssrn.com/abstract=375520 or http://dx.doi.org/10.2139/ssrn.375520

Ana Cristina De Souza Pedroso (Contact Author)

Institute of Applied Economic Research (IPEA) ( email )

Av. Pres. Antonio Carlos , 51 - 17 andar
Rio de Janeiro, RJ, 20020-010
Brazil

Octavio Augusto Fontes Tourinho

PPGCE/FCE/UERJ - Univ. do Estado do Rio de Janeiro ( email )

Rua São Francisco Xavier 524
Sala F-8039
Rio de Janeiro, RJ 20550-013
Brazil
+55(021) 2587-7240 (Phone)
+55(21)2587-7744 (Fax)

HOME PAGE: http://www.fce.uerj.br/pos_grad.htm

Honorio Kume

Institute of Applied Economic Research (IPEA) ( email )

Av. Presidente Antonio Carlos 51
Directorate of Macroeconomics
RJ 20020-010 Rio de Janeiro
Brazil
+55 21 3804-8000 (Phone)
+55 21 2240-1920 (Fax)

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