IDEAS home Printed from https://ideas.repec.org/a/ags/bdbjaf/200218.html
   My bibliography  Save this article

An Armington Assumption Approach To Model International Trade Flow And Market Share For Apples In Canada

Author

Listed:
  • Haq, Zahoor Ul
  • Ishaq, Muhammad

Abstract

The purpose of this study is to estimate elasticities of substitution for apples imported from US, New Zealand and Chile. The study also tested the impact of NAFTA on the apple trade using trade data from 1988 to 2004. The assumptions of Armington model are used to model trade flow of apples employing Linear Approximate of Almost Ideal Demand System. NAFTA has a significant affect on the exporters' share of Canadian import market. Further, New Zealand is emerging one of the strong exporters of apples to Canada by gaining most of the share lost by other countries. Import demand of apples in the case of New Zealand and Chile are elastic while just above unit elastic in case of US. Apples imported from New Zealand were complements to those imported from Chile. The elasticities of substitution of New Zealand and Chile are statistically significant and slightly elastic while that of US is insignificant and inelastic. The rest of the world has elastic elasticities of substitution mainly due to the low share in Canadian imports of apples. Homotheticity could not be rejected that has important implications for international trade and CGE modeling. However, more evidence on testing of the Armington assumptions in trade flow investigations of fruits and vegetables are required.

Suggested Citation

  • Haq, Zahoor Ul & Ishaq, Muhammad, 2005. "An Armington Assumption Approach To Model International Trade Flow And Market Share For Apples In Canada," Bangladesh Journal of Agricultural Economics, Bangladesh Agricultural University, vol. 28(1-2), pages 1-16, December.
    • Handle: RePEc:ags:bdbjaf:200218
    DOI: 10.22004/ag.econ.200218
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/200218/files/Article_01%20Vol-%20XXVIII.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.200218?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Alston, Julian M & Foster, Kenneth A & Green, Richard D, 1994. "Estimating Elasticities with the Linear Approximate Almost Ideal Demand System: Some Monte Carlo Results," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 351-356, May.
    2. Shoichi Ito & Dean T. Chen & E. Wesley F. Peterson, 1990. "Modeling international trade flows and market shares for agricultural commodities: a modified Armington procedure for rice," Agricultural Economics, International Association of Agricultural Economists, vol. 4(3-4), pages 315-333, December.
    3. Hickman, Bert G. & Lau, Lawrence J., 1973. "Elasticities of substitution and export demands in a world trade model," European Economic Review, Elsevier, vol. 4(4), pages 347-380, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alejandro Nin, 1994. "Los modelos de flujos de comercio. Una aplicación en el caso de los lácteos," Documentos de Trabajo (working papers) 0994, Department of Economics - dECON.
    2. Tarek Atalla & Simona Bigerna & Carlo Andrea Bollino, 2018. "Energy demand elasticities and weather worldwide," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(1), pages 207-237, April.
    3. Taniguchi, Kiyoshi & Chern, Wen S., 2000. "Income Elasticity Of Rice Demand In Japan And Its Implications: Cross-Sectional Data Analysis," 2000 Annual meeting, July 30-August 2, Tampa, FL 21755, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Maarten Dossche & Freddy Heylen & Dirk Van den Poel, 2010. "The Kinked Demand Curve and Price Rigidity: Evidence from Scanner Data," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(4), pages 723-752, December.
    5. James L. Seale & Mary A. Marchant & Alberto Basso, 2003. "Imports versus Domestic Production: A Demand System Analysis of the U.S. Red Wine Market," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(1), pages 187-202.
    6. Aborisade, Olumide & Carpio, Carlos, 2017. "Household Demand for Meat in Nigeria," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252839, Southern Agricultural Economics Association.
    7. Mendez, Samara & Peacock, Jacob, 2021. "Exploring the impact of plant-based milk alternatives in the US," OSF Preprints j89qm, Center for Open Science.
    8. Geraci, Vincent J. & Prewo, Wilfried, 1978. "A supply and demand model of bilateral trade in a multicountry framework," Kiel Working Papers 84, Kiel Institute for the World Economy (IfW Kiel).
    9. Helliwell, John F. & Padmore, Tim, 1985. "Empirical studies of macroeconomic interdependence," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 2, chapter 21, pages 1107-1151, Elsevier.
    10. Dhar, Tirtha & Chavas, Jean-Paul & Cotterill, Ronald W. & Gould, Brian W., 2002. "An Econometric Analysis of Brand Level Strategic Pricing Between Coca Cola and Pepsi Inc," Working Papers 201553, University of Wisconsin-Madison, Department of Agricultural and Applied Economics, Food System Research Group.
    11. Acosta, Juan & Rancan, Antonella & Sergi, Francesco, 2022. "Centralised and Decentralised Approaches to Multi-Country Macroeconometric Modelling at the Commission of the European Communities: The Short-Lived EUROLINK Model," Economics & Statistics Discussion Papers esdp22081, University of Molise, Department of Economics.
    12. John Curtis & Brian Stanley, 2016. "Analysing Residential Energy Demand: An Error Correction Demand System Approach for Ireland," The Economic and Social Review, Economic and Social Studies, vol. 47(2), pages 185-211.
    13. Richard Berner, 1977. "Estimating consumer import demand equations," International Finance Discussion Papers 105, Board of Governors of the Federal Reserve System (U.S.).
    14. Vickner, Steven S. & Marks, Leonie A. & Kalaitzandonakes, Nicholas G., 2003. "Food Product Recalls, Agbiotech And Consumer Response: The Case Of Starlink," 2003 Annual meeting, July 27-30, Montreal, Canada 22050, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Pauline Affeldt & Elena Argentesi & Lapo Filistrucchi, 2021. "Estimating Demand with Multi-Homing in Two-Sided Markets," Working Papers wp1165, Dipartimento Scienze Economiche, Universita' di Bologna.
    16. Hélène Erkel‐Rousse & Daniel Mirza, 2002. "Import price elasticities: reconsidering the evidence," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 35(2), pages 282-306, May.
    17. Marsh, Thomas L. & Chacon-Cascante, Adriana & Crespi, John M., 2005. "Import demand of Bananas in the European Union," 2005 Annual meeting, July 24-27, Providence, RI 19157, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Alexandre Gohin & Fabienne Féménia, 2009. "Estimating Price Elasticities of Food Trade Functions: How Relevant is the CES‐based Gravity Approach?," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(2), pages 253-272, June.
    19. T. Kesavan & Zuhair A. Hassan & Helen H. Jensen & Stanley R. Johnson, 1993. "Dynamics and Long-run Structure in U.S. Meat Demand," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 41(2), pages 139-153, July.
    20. Anton Bondarev, 2008. "Evaluation of Demand Functions for foodstuffs in Russian Economy in 1999–2004," Research Paper Series, Gaidar Institute for Economic Policy, issue 118P, pages 166-166.

    More about this item

    Keywords

    Agribusiness;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:bdbjaf:200218. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/febaubd.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.