Economic Research and Perspectives

Economic Research and Perspectives

The Estimation of Armington Elastisity of Substitution for Selected Goods

Authors
1 Department of Economics, Shahid Beheshti University
2 M.A. in Economic Systems Planning, Shahid Beheshti University
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