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An empirical investigation of the trade benefit function

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  • Wong, K.K. Gary

Abstract

We introduce new definition and estimation procedures of trade benefit functions that allow researchers to generate estimable import share functions. The method is based on the work of Chau and Färe, while it is more general in permitting the estimation of Hicksian import share systems, which are explicit in an unobservable variable but may lack a closed-form representation in terms of observable variables. An empirical application demonstrates the feasibility of the proposed method.

Suggested Citation

  • Wong, K.K. Gary, 2013. "An empirical investigation of the trade benefit function," Economics Letters, Elsevier, vol. 119(2), pages 150-153.
    • Handle: RePEc:eee:ecolet:v:119:y:2013:i:2:p:150-153
    DOI: 10.1016/j.econlet.2013.01.008
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    References listed on IDEAS

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    1. Moschini, Giancarlo & Moro, Daniele, 1994. "Autocorrelation specification in singular equation systems," Economics Letters, Elsevier, vol. 46(4), pages 303-309, December.
    2. Keith R. McLaren & K. K. Gary Wong, 2009. "The Benefit Function Approach to Modeling Price-Dependent Demand Systems: An Application of Duality Theory," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1110-1123.
    3. McLaren, Keith Robert & Wong, K. K. Gary, 2009. "AJAE appendix for The Benefit Function Approach to Modeling Price-Dependent Demand Systems: An Application of Duality Theory," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 91(4), pages 1-2, January.
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    More about this item

    Keywords

    Trade benefit functions; Import share systems; Numerical inversion;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

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