IDEAS home Printed from https://ideas.repec.org/a/eej/eeconj/v16y1990i3p257-264.html
   My bibliography  Save this article

A Modified Cournot Aggregation Condition for Obtaining Estimates of Cross-Elasticities of Demand

Author

Listed:
  • David G. Tarr

    (World Bank)

Abstract

Insomuch as researchers who estimate cross elasticities of demand implicitly use the assumption of weakly separable utility or production, this paper explicitly uses weak separability to derive what it calls the "modified Cournot aggregation condition." The modified Cournot aggregation condition imposes a restriction on sum of the share weighted value of the cross elasticities. Consequently, the condition can be used to complement statistical testing of parameter values or be used in the estimation process itself. An example is provided of a three-region model of world steel trade where the condition has proved useful in avoiding perverse results.

Suggested Citation

  • David G. Tarr, 1990. "A Modified Cournot Aggregation Condition for Obtaining Estimates of Cross-Elasticities of Demand," Eastern Economic Journal, Eastern Economic Association, vol. 16(3), pages 257-264, Jul-Sep.
  • Handle: RePEc:eej:eeconj:v:16:y:1990:i:3:p:257-264
    as

    Download full text from publisher

    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume16/V16N3P257_264.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. L Alan Winters, 2015. "Separability And The Specification Of Foreign Trade Functions," World Scientific Book Chapters, in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 8, pages 149-173, World Scientific Publishing Co. Pte. Ltd..
    2. Grossman, Gene M, 1982. "Import Competition from Developed and Developing Countries," The Review of Economics and Statistics, MIT Press, vol. 64(2), pages 271-281, May.
    3. Jondrow, James M & Chase, David E & Gamble, Christopher L, 1982. "The Price Differential between Domestic and Imported Steel," The Journal of Business, University of Chicago Press, vol. 55(3), pages 383-399, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Toner, Jeremy & Wardman, Mark & Shires, Jeremy & Teklu, Fitsum & Hatfield, Andrew, 2020. "Enhancing rail direct demand models with competition between ticket types using contributions from economic theory and market research," Transportation Research Part A: Policy and Practice, Elsevier, vol. 138(C), pages 127-144.
    2. Thomas, Brinda A. & Azevedo, Inês L., 2013. "Estimating direct and indirect rebound effects for U.S. households with input–output analysis. Part 2: Simulation," Ecological Economics, Elsevier, vol. 86(C), pages 188-198.
    3. Touhami Abdelkhalek & Dorothée Boccanfuso, 2021. "Impact of Tax Reforms in Applied Models: Which Functional Forms Should Be Chosen for the Demand System? Theory and Application for Morocco," CIRANO Working Papers 2021s-07, CIRANO.
    4. Sérgio Fracalanza, Paulo & Nunes Ferreira, Adriana & Fava Neves, Marcos, 2007. "Impacts of a liberalization in the USA market for Frozen Concentrated Orange Juice: why Florida´s producers are so afraid?," Revista de Economia e Sociologia Rural (RESR), Sociedade Brasileira de Economia e Sociologia Rural, vol. 45(4), January.
    5. Thomas, Brinda A. & Azevedo, Inês L., 2013. "Estimating direct and indirect rebound effects for U.S. households with input–output analysis Part 1: Theoretical framework," Ecological Economics, Elsevier, vol. 86(C), pages 199-210.

    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. Clinton Shiells, 1989. "Competition and complementarity between U.S. imports from developed and newly industrializing countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 125(1), pages 114-128, March.
    2. Klonaris, Stathis, 2017. "Measuring the Intensity of Competition in the Greek Imported Meat Market," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 0(Issue 1), January.
    3. van Heeswijk, B J & de Boer, P M C & Harkema, R, 1993. "A Dynamic Specification of an AIDS Import Allocation Model," Empirical Economics, Springer, vol. 18(1), pages 57-73.
    4. Brülhart, Marius & Trionfetti, Federico, 2009. "A test of trade theories when expenditure is home biased," European Economic Review, Elsevier, vol. 53(7), pages 830-845, October.
    5. Agénor, Pierre-Richard & Bayraktar, Nihal & El Aynaoui, Karim, 2008. "Roads out of poverty? Assessing the links between aid, public investment, growth, and poverty reduction," Journal of Development Economics, Elsevier, vol. 86(2), pages 277-295, June.
    6. Helena Marques, 2008. "Trade And Factor Flows In A Diverse Eu: What Lessons For The Eastern Enlargement(S)?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(2), pages 364-408, April.
    7. de Boer, P. M. C. & Harkema, R., 1986. "An Algorithm For Maximum Likelihood Estimation Of A New Covariance Matrix Specification For Sum-Constrained Models," Econometric Institute Archives 272357, Erasmus University Rotterdam.
    8. Olper, Alessandro & Pacca, Lucia & Curzi, Daniele, 2014. "Trade, import competition and productivity growth in the food industry," Food Policy, Elsevier, vol. 49(P1), pages 71-83.
    9. Hiau Looi Kee & Alessandro Nicita & Marcelo Olarreaga, 2008. "Import Demand Elasticities and Trade Distortions," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 666-682, November.
    10. Malley, Jim & Moutos, Thomas, 2006. "Do excessive wage increases raise imports?: Theory and evidence," Japan and the World Economy, Elsevier, vol. 18(2), pages 194-220, March.
    11. Rafael Reuveny & Heejoon Kang, 2003. "A Simultaneous‐Equations Model of Trade, Conflict, and Cooperation," Review of International Economics, Wiley Blackwell, vol. 11(2), pages 279-295, May.
    12. Lee, Young-Jae & Kennedy, P. Lynn & Hilbun, Brian M., 2008. "Import Demand System Analysis Of The South Korean Wine Market With The Source Differentated Aids Model," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6345, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. Hanrahan, Kevin F. & Westhoff, Patrick C. & Young, Robert E., II, 2001. "Trade Allocation Modeling: Comparing The Results From Armington And Locally Regular Ai Demand System Specifications Of A Uk Beef Import Demand Allocation Model," 2001 Annual meeting, August 5-8, Chicago, IL 20510, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    14. Yang, Seung-Ryong & Koo, Won W., 1994. "Japanese Meat Import Demand Estimation With The Source Differentiated Aids Model," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 19(2), pages 1-13, December.
    15. Peter Egger & Kurt Kratena, 2003. "A tale of competition between Eastern and Southern Europe," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 139(1), pages 114-130, March.
    16. Koukouritakis, Minoas, 2005. "EU Accession Effects on the Demand for Manufactures: the Case of Greece," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 58(4), pages 471-488.
    17. Tombazos, Christis G., 1999. "The impact of imports on the demand for labor in Australia," Economics Letters, Elsevier, vol. 62(3), pages 351-356, March.
    18. DeRosa, Dean A., 1998. "Regional integration arrangements : static economic theory, quantitative findings, and policy guidelines," Policy Research Working Paper Series 2007, The World Bank.
    19. Peter Egger & Kurt Kratena, 2001. "A Tale of Competition between Eastern and Southern Europe (Rerum Concordia Discors)," WIFO Working Papers 170, WIFO.
    20. David G. Tarr, 1988. "The Steel Crisis in the United States and the European Community: Causes and Adjustments," NBER Chapters, in: Issues in US-EC Trade Relations, pages 173-200, National Bureau of Economic Research, Inc.

    More about this item

    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:eej:eeconj:v:16:y:1990:i:3:p:257-264. 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: Victor Matheson, College of the Holy Cross (email available below). General contact details of provider: https://edirc.repec.org/data/eeaa1ea.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.