Template-Type: ReDIF-Paper 1.0
Author-Name: Soo Jung Ha
Author-Name-First: Soo Jung
Author-Name-Last: Ha
Author-Email: soo.ha@strath.ac.uk
Author-Workplace-Name: Department of Economics, University of Strathclyde
Author-Name: Geoffrey  Hewings
Author-Name-First: Geoffrey 
Author-Name-Last: Hewings
Author-Email: hewings@illinois.edu 
Author-Workplace-Name: Regional Economics Applications Laboratory, University of Illinois, US
Author-Name: Karen Turner
Author-Name-First: Karen
Author-Name-Last: Turner
Author-Email: karen.turner@strath.ac.uk
Author-Workplace-Name: Department of Economics, University of Strathclyde
Title: Econometric estimation of Armington import elasticities for regional CGE models of the Chicago and Illinois economies
Abstract: Our current research program is concerned with developing regional and interregional computable general equilibrium models for Chicago and the Midwest respectively. One of the main concerns associated with regional CGE modeling is determination of the empirical parameters of models, particularly elasticities and share parameters. A common problem is the lack of appropriate regional data for econometric estimation. Consequently, it is important to identify key parameters that are likely to be important in determining quantitative results and prioritise these for estimation where appropriate data are available.
In this paper we focus on estimating regional trade (import) substitution parameters, both because these will generally be important in analysis for regional economies, which tend to be more open than national economies, and also because one of the main areas of our current research is to model the pollution content of trade flows between regions and the impacts on pollution ‘trade balances’ in response to changes in activity. While our work will eventually encompass the five Midwest states of Illinois, Indiana, Michigan, Ohio and Wisconsin, our first step in the process of parameter estimation for our intended suite of regional and interregional CGE models is to estimate commodity import elasticities for the Illinois economy (to be applied also to our single region Chicago model, in the absence of appropriate data for region-specific estimation at that level). We apply a model where we take account of market size and distance in estimating the substitutability between commodities produced in Illinois and other US states.
Length: 22 pages
Creation-Date: 2008-10
Revision-Date: 
Publication-Status: 
File-URL:  http://www.strath.ac.uk/media/1newwebsite/departmentsubject/economics/research/researchdiscussionpapers/2008/08-10(REVISED).pdf
File-Format: Application/pdf
Number: 0810
Classification-JEL: C68, R13, F10
Keywords: general equilibrium model, regional modelling, import elasticity
Handle: RePEc:str:wpaper:0810