Estimation of Armington elasticities in a CGE economy-energy-environment model for Europe

Gabriella Németh, László Szabó and Juan-Carlos Ciscar

Economic Modelling, 2011, vol. 28, issue 4, 1993-1999

Abstract: The main goal of the article is to estimate Armington elasticities of the energy and energy-intensive sectors of the GEM-E3 computable general equilibrium model. The model follows the standard two-stage budget optimisation of the consumer by first optimising between domestically produced and imported goods and, then, by country of origin. A panel data econometric framework is used here with dynamic adjustment to capture both the long and short term elasticities for the studied six aggregated sectors in Europe. The estimated long-term elasticities are in line with the literature, but higher than those used in the GEM-E3 model. The results suggest that consumer choice appears to be more price sensitive between the domestic and the composite imported goods, and amongst the importers, than already assumed in the model.

Keywords: Armington; trade; elasticities; Econometric; estimation; Computable; general; equilibrium; model (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S026499931100099X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:28:y:2011:i:4:p:1993-1999

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().