An Empirical Analysis of the Demand for Imports in Three CARICOM Member Countries: An Application of the Bounds Test for Cointegration

This paper provides fresh estimates of income and price elasticities of import demand in Guyana, Jamaica, and Trinidad and Tobago using a bounds test for cointegration. In addition, the paper also provides estimates of the consumption, investment, and exports elasticities of import demand. These latter elasticities were all found to be positive and statistically significant with values ranging from 0.16 to 0.55 in the long-run.     

Elasticities of substitution in industry: What do we learn from econometric estimates?

If elasticities of substitution differ systematically among industries, different sets of econometric estimates should reveal this by yielding similar industry rankings. Ranking experiments are carried out for 12 sets of US, and four sets of developing country, two digit level estimates. In general, industry rankings differ significantly from study to study, and it is not possible to identify industries with either high or low elasticities of substitution. This may indicate that substitution elasticities vary significantly at different times and places, that variation of elasticities within two digit industries is great enough to obscure differences between industries, or that theoretical and data problems make current estimates unreliable.     

Trade elasticities in transition countries

Trade elasticities play a crucial role in translating economic analysis of external adjustment issues into macroeconomic policy. Trade demand elasticities allow policy makers to draw important conclusions about exchange rate misalignments or trade balance changes. This paper endeavors to bring transition countries, namely those from Central and Eastern Europe and the Commonwealth of Independent States, into the universe of estimated price and activity elasticities of trade volumes. The estimated results imply that the traditional ‘Marshall-Lerner’ condition is not satisfied for transition countries. The estimated price elasticities of export and import demands perform fairly well in predicting out-of-sample changes in trade balance ratios for a broad set of transition countries. In the long run, however, exports and imports are mainly driven by income changes.     

Consumer demand with variable preferences in taiwan: an application of the generalized Fechner-Thurstone direct utility function

Time series data on five consumer commodity groups for Taiwan are analyzed using the generalized Fechner-Thurstone direct utility function. Income and price-demand elasticities are derived from unconstrained maximum likelihood estimates of the constant elasticities of marginal rates of substitutions. The elasticities are similar to those obtained for Taiwan using a translog indirect utility function. However, the estimates obtained for Taiwan are significantly different from those reported by other researchers for South Korea and the United States which serves as an indication of differences in the stages of economic development between the economies.     

Projecting meat and cereals demand for China based on a meta-analysis of income elasticities

There are many projections for China's food demand, and the projection results differ significantly from each other. Different values for income elasticities could be a major reason. This study projects meat and cereals demand for China based on a meta-analysis of the income elasticity estimates using a collection of 143 and 240 income elasticity estimates for cereals and meat products, respectively, from 36 primary studies. We find that income elasticities for most cereals (general cereals, rice, and coarse grains) and all meat products (general meat, pork, poultry, beef & mutton) tend to decline as per capita income increases, except for wheat, which increases. Taking this into account, differences between consumption projections based on time-varying income elasticities and values based on constant elasticities are substantial in quantities and increase over time.     

The elasticity of substitution as a proxy measure of economic integration

This study examines how the accession of Greece to the European Union affected the Greek economy. Transcendental production functions of agriculture, industry, and service sectors of Greece, Germany, and France were estimated and tested for structural stability. Based on two estimated parameters of sectoral production functions and the corresponding data on capital-to-labor ratios, sectoral elasticities of substitution were constructed as vectors of values, varying with time. It was found that the elasticities of the traded sectors, industry, and manufacturing converged. The elasticities of substitution of the nontraded sector service and the traded, but protected, sector of agriculture diverged.     

Sectoral elasticities of substitution between labour and capital in venezuelan manufacturing: A cross-sectional micro analysis

This paper presents estimates of the elasticities of substitution between capital and labour for 19 Venezuelan manufacturing industries. The elasticities are estimated using micro data collected from the 1970 Venezuelan Census of Manufacturing. Estimates of these elasticities are generally not significantly different from unity. This suggests that the traditional view of limited substitution possibilities in manufacturing sectors of less developed countries does not apply in the Venezuelan case. Moreover, the Cobb-Douglas functional specification may be appropriate for estimating industrial production functions. In addition, the ‘market’ position in the current ‘structuralist versus market’ controversy concerning the labour absorption problem plaguing LDCs is supported.     

Farm credit and credit demand elasticities in Shaanxi and Gansu

This paper empirically estimates individual household credit demand elasticities based on 897 farm households surveyed in Shaanxi and Gansu provinces in the People's Republic of China (PRC) in October 2009. We used survey-based experimental techniques to extract individual household credit demand functions from which we estimated point demand elasticities. From a theoretical point of view, we proposed that as interest rates fell the demand for credit increased in elasticity, and this appears to hold in our data. We find a range of elasticities with mean point estimates of about ? 0.6. We find that nearly 20% of farm households have nearly perfectly inelastic demands for credit but we also find that nearly 20% have elasticities above ? 0.75 including some 15% that have elasticities greater than ? 1.0. Previous studies that have argued against credit policies because of the low inelasticity of demand do not generally hold. There is much heterogeneity in credit demand and we would argue that a full spectrum of targeted credit policies can be used to address differences across farms.     

外资、产业集聚与失业:新经济地理观

本文整合Harris-Todaro(1970)的城市失业现象与Krugman(1991)的新经济地理理论,建立新经济地理失业模型,探讨外资对于就业、城市失业量(率)与产业结构的影响;焦点置于要素替代差异、Todaro矛盾以及引进外资国家的福利分析。在两国架构中,当引进外资时,若要素替代弹性较低,资本引进国随着制造业扩张,其劳动雇佣量固然上升,但城市失业量亦随之上扬,出现Todaro矛盾现象。反之,在高要素替代情况下,引进外资的国家可能出现制造业就业和城市失业量同时下降的现象。     

Errors-in-variables, supply side effects, and price elasticities in foreign trade

Errors-in-Variables, Supply Side Effects, and Price Elasticities in Foreign Trade.—Previous estimates of price elasticities in foreign trade are likely to be biased upward due to errors-in-variables, omission of supply side influences, aggregation, bad measurement of price competitiveness, and misspecification of the estimation equations. This paper incorporates the supply side into the traditional demand for export equation and uses a panel data approach for OECD manufacturing to provide unbiased estimates of price elasticities. The estimates indicate that the sum of the absolute import and export price elasticities is close to one and that currency depreciations are likely to adversely affect trade balances in the long run due to supply side influences. JEL no. E3, F1, F4     

An estimate of aggregate supply response in South African agriculture

Agricultural supply has traditionally been assumed to be relatively inelastic. Time series estimates have generally supported this hypothesis. Estimates based on cross‐sectional observations have generally yielded higher elasticities. It has been argued that cross‐sectional analyses are more appropriate than time series analyses for estimating long‐run elasticities. A cross‐sectional analysis was done on South African data. Quantity supplied was shown to be a function of output/input price ratios, land quality, average rainfall and time. The long‐run supply elasticity appears to be approximately 0,92. This has important implications for agricultural price policy. Policies based on the assumption of very low supply elasticities are likely to distort markets and production.     

Expenditure patterns and elasticities of rural households sampled in two communal areas of KwaZulu-Natal

Expenditure patterns among a sample of 99 rural households in two communal districts in KwaZulu-Natal were investigated to determine the potential impact of a widespread income shock on household expenditure. The results showed expenditure elasticities of close to unity for food. Low elasticities were found for staple foods. Elasticities for meat, meat products and poultry were close to unity, while horticultural products showed the greatest potential for demand growth within the food category. Of the statistically significant commodity categories, expenditure elasticities for durables, housing and transport were more than double those estimated for the aggregate food category. For consumer items, the district expenditure elasticities were estimated to be 0,76 and 0,71, while expenditure on social obligations would not increase with rural incomes. Wealthier households (the top expenditure decile) have a greater propensity for increased expenditure on transport, while poorer households show a greater propensity for increased expenditure on housing and durables. Although agriculture has the potential to generate widespread growth in rural incomes, the preference for manufactured goods casts some doubt on the strength of consumption multipliers for locally produced farm and non-farm goods in rural KwaZulu-Natal.     

Some aspects of employment in Indian agriculture

The purpose of this study is to examine the effects of structural differences (due to size of holding) on employment in Indian agriculture. Translog cost function is applied, and restrictions are tested using a likelihood ratio test. For small- and medium-size farms, joint estimation of a non-homothetic cost function with cost share equations is conducted, and Allen elasticities of substitution and price elasticities of demand for eight different inputs are derived. Inputs are classified as substitutes and complements using Slutsky-Hicks-Allen-Schultz definition. Each source of labor against hired labor is a substitute for small farms (0–5 hectares). Some policy analysis of rural employment and a fertilizer subsidy scheme is presented using price elasticities of demand for small and medium farms.     

Sensitivity of Yield and Input Demand Elasticities for Wetland Rice in Java

This study uses pooled time series data for wetland rice in Java to analyse the sensitivity of yield and input demand elasticities to differences in the specification of farmers' expectations, in alternative data sources and in the functional forms used in the estimation. The results show that yield and fertiliser input elasticities are less fragile than those of labour demand, which are quite sensitive to data and model specifications.     

人民币汇率变动对中欧出口价格的传递效应

本文探讨了人民币升值对向欧元区出口价格的汇率传递效应及其对中欧贸易顺差的调节作用。作者利用1999年1月至2006年12月的月度数据,在SITC一位数商品分类层面上,考察了人民币/欧元汇率变动对中国向欧元区出口价格的影响。实证结果显示,不同类商品的出口价格汇率传递弹性存在较大差异,汇率变动引起中国向欧元区出口价格较大幅度的调整,人民币升值对占中欧出口总额一半以上的第6类和第7类商品出口没有抑制作用。因此,人民币升值对中欧贸易顺差的调节作用有限。     

Estimating Firm Behavior under Rationing: a Panel Data Study of the Chinese Manufacturing Industry

The purpose of this paper is to investigate the impacts of rationing on firm behavior. A virtual price approach is adopted to derive the rationed elasticities of variable input demands and output supply under a translog profit function. To illustrate the difference between the rationed and unrationed elasticities, we conduct an analysis using a firm-level annual survey data of China over the period 1985–88. Our estimation results indicate that the values of most elasticities would have been affected significantly if the government had imposed rationing on material inputs. The behavior of Chinese firms would have been seriously distorted in a complicated way. The firms would have over-responded to market signals in making some of their input or output decisions and, at the same time, might have under-reacted, or would have not changed their reaction, in making the other input or output decisions, under a rationing regime.     

Tax Base Elasticities: A Multi-State Analysis of Long-Run and Short-Run Dynamics

We examine the relative dynamic responses of state personal tax revenues and sales tax bases to changes in state personal income. Our econometric analysis, which includes separate analyses of long-run and short-run dynamics for each state, permits the estimation of asymmetric short-run responses depending upon the relationship between current and expected tax base growth. Results indicate that the average long-run elasticity for income taxes is more than double that for sales taxes. Most states have asymmetric short-run income elasticities, which are again greater for income taxes than for sales taxes. However, a joint analysis of long- and short-run dynamics reveals that neither tax is universally more volatile. After calculating state-specific income elasticities for both taxes, we employ cross-section regression techniques to explain the variation in elasticities across states. Several policy factors are found to be important, including elements of tax bases and rate structures.     

How Dutch Teenagers spend their Money**

Adolescents have relatively large sums of money at their disposal; How and on what goods they spend their money is the subject of this paper. An AID system describing the influences of demographic characteristics, pseudo-prices and income on various expenditure categories is estimated. The system is estimated in two steps with the first step explaining zero-expenditures. Income elasticities and pseudo-price elasticities are presented. A comparison is made on the basis of three large data sets, gathered in 1984, 1990, and 1992.     

Income and Price Elasticities of Demand in South Africa: An Application of the Linear Expenditure System

This paper investigates the expenditure patterns of South African households using detailed cross‐sectional expenditure and price data that varies across region and time. Linear expenditure system parameter estimates are used to calculate income and price elasticities for a number of product categories at different points of the income distribution. We find substantial variation in the price and income elasticities of demand for items across the income distribution, with the bottom quartile being extremely sensitive to increases in the price of food and clothing items, and the top quartile being as sensitive as households in developed countries.     

An empirical examination of the disaggregated import demand of Korea—the case of information technology products

This article presents an empirical analysis of the import demand for certain information technology products in Korea. These products have been recognized as essential for further economic growth in Korea, as the Korean government aims to transform the economy into one based on information technology. The unrestricted error correction model is used to derive the long run price and income elasticities of import demand, considering the small sample size. The price elasticities are revealed to be quite high in all cases, implying that lowering of the tariff rates would increase the import of those products substantially.