The Estimation of Armington Elastisity of Substitution for Selected Goods

Abstract

Armington elasticity measures the degree of responsiveness of relative demand of an imported good to its domestically produced one, to relative home produced-imported price ratio of that good. In fact, it shows the competitiveness (or its substitutability) of domestically produced goods with respect to the imported ones. These elasticities were estimated for 23 selected goods (because of data deficiencies) at 2, 3 and 4 digits of ISIC classification and found them (for 19 goods) positive and statistically significant.

Keywords

• armington elasticities
• elasticities of substitution
• competitiveness of goods
• wto