Import demand elasticities revisited

Abstract

In this paper, we present import demand elasticities estimated for 167 countries over 5,124 products at the six-digit level of the Harmonised System. Following the semiflexible translog GDP function approach proposed by Kee et al. (2008), we estimate unilateral import demand elasticities for the period 1996-2014. Results are differentiated by country and product characteristics. South Asia and North America are associated with the most elastic import demand. Countries exhibiting the highest average elasticities belong to the economically most important countries in their respective regions, while countries with the lowest import demand elasticities are typically small island states. Import-weighted results suggest that especially countries rich in natural resources -particularly fossil fuels -are facing an inelastic import demand, with the agrifood sector for these states being more price-responsive than the manufacturing sector. Demand is found to be least price-sensitive for machinery and electrical equipment, and most price-elastic for the energy sectors. Distinguishing between the use of products, the highest import demand elasticities are associated with intermediate goods, which appears particularly noteworthy in the context of an increasing importance of global value chains, the global trade slowdown since 2011 and ongoing negotiations of mega-regional trade deals.

Estimation of Economic Welfare Gains from Trade Facilitation in the Andean Community

“…This expected increase in trade volumes because of improving importing costs demonstrates the potential trade-enhancing effect of reducing friction at the borders. Sources: 1,3-7 , authors' calculations; 2 , Grübler et al [27]. Notes: 2 , Elasticity of import demand; 3 , change in imports.…”

“…Estimation of the potential economic gains from improving import costs (with Singapore as the benchmark). Sources: 1,3-7 , authors' calculations; 2 , Grübler et al [27]. Notes: 2 , Elasticity of import demand; 3 , change in imports.…”

“…The reactive change in quantities that is necessary to find the surpluses and losses will be found by using elasticities. These country-specific import elasticity values are taken from Grübler et al [27], and for the export elasticities, from Tokarick [28]. The country-specific import demand functions reported in [27] are based on a semiflexible translog GDP maximization function outlined by Kohli [29], while the country-specific export price elasticities data are based on a standard general equilibrium methodology.…”

“…Summary table of the data to be used in Equations (3)-(6).Sources: 1 , Authors' calculation as reported in Table1Column 7; 2,3 authors' calculation using Equation (2); 4 , UN Comtrade Database[33];5 , World Bank[36];6 , Grübler et al[27]. Notes:3 , the current volume of imports excludes crude oil (HS 2709), copper ore (HS 2603), petroleum gas (HS 2711), and any imports that are not waterborne.…”

Selected Factors Influencing China's Palm Oil Import Demand from Malaysia

“…A country will import more Malaysian palm oil if Malaysia's price is lower than Indonesia's, and vice versa (Suherman, Suharno, & Harianto, 2016). This is due to the agri-food sector is more sensitive toward price than other sectors like manufacturing (Grübler, Ghodsi, & Stehrer, 2022). Thus, it seems to be important to study the influence of palm oil trade price from Indonesia on China's palm oil demand from Malaysia, hence, this study included this factor in the regression model to complement the past studies where this factor is found absent.…”