Estimating price elasticities of food trade functions: How relevant is the gravity approach?

Fabienne Femenia and Alexandre Gohin

No 7211, Working Papers from TRADEAG - Agricultural Trade Agreements

Abstract: The main objective of the paper is related to the long standing issue of the econometric estimation of price elasticity of food trade functions. We investigate the relevance of the prominent gravity approach. This approach is based on the assumptions of symmetric, monotone, homothetic, CES preferences. We test all these assumptions using European intra trade of cheese. In a general way, all assumptions made on preferences by the gravity approach are not supported by our data set. The bias induced on the estimated price elasticities is not univocal.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 37
Date: 2007
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:tragwp:7211

DOI: 10.22004/ag.econ.7211

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