THE PRODUCTION THEORY APPROACH TO IMPORT DEMAND ANALYSIS: A COMPARISON OF THE ROTTERDAM MODEL AND THE DIFFERENTIAL PRODUCTION APPROACH

Results indicate that, when comparing the unconditional derived-demand elasticities to the unconditional consumer demand elasticities, significant differences emerge due to the differences in the first-stage estimation procedure between the differential production approach and the Rotterdam model. In comparing the consumer demand price/corss-price elasticities to the derived-demand price/cross-price elasticities, it is clear that use of the Rotterdam model when a production approach should be used can lead to overestimation, underestimation, and incorrect signs in deriving unconditional price effects.


Issue Date:
2002-12
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/15070
Published in:
Journal of Agricultural and Applied Economics, Volume 34, Number 3
Page range:
431-433
Total Pages:
3
JEL Codes:
D12; D24; F10; F14; Q17




 Record created 2017-04-01, last modified 2017-04-04

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