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Estimation of own- and cross-price elasticities of disaggregated imported and domestic goods in Russia

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Abstract
The paper employs panel data analysis to estimate price and income elasticities for disaggregated domestic and imported goods using the Budget Survey of Russian households and prices of imported and domestic goods in Russia. The project is implemented using two types of data: the national level data for average households and households differentiated by income, and the data for the average regional households. Three different specifications of the demand equations: the double-logarithmic, the Linear Approximation to the AIDS, and the specification derived from the maximization of the CES utility function, are estimated for eight categories of traded non-food goods. The application of the instrumental-variable estimators to the regional data enables the endogeneity biases of the elasticity coefficients to be substantially corrected. The results of estimations of elasticities of demand for domestic and imported goods obtained for households differentiated by income indicate certain differences between estimated elasticities. This fact may be important for evaluating the impact of implementation of price and tariff policies on consumers with different levels of income.

Suggested Citation

  • Ivanova Nadezhda, 2005. "Estimation of own- and cross-price elasticities of disaggregated imported and domestic goods in Russia," EERC Working Paper Series 05-13e, EERC Research Network, Russia and CIS.
    • Handle: RePEc:eer:wpalle:05-13e
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    References listed on IDEAS

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    Cited by:

    1. Timo Baas & Silvia Maja Melzer, 2012. "The Macroeconomic Impact of Remittances: A sending country perspective," Norface Discussion Paper Series 2012021, Norface Research Programme on Migration, Department of Economics, University College London.
    2. Bajzik, Jozef & Havranek, Tomas & Irsova, Zuzana & Schwarz, Jiri, 2019. "Estimating the Armington Elasticity: The Importance of Data Choice and Publication Bias," MPRA Paper 95031, University Library of Munich, Germany.
    3. Ibon Galarraga & David Heres Del Valle & Mikel González-Eguino, 2011. "Price Premium for High-Efficiency Refrigerators and Calculation of Price-Elasticities for Close-Substitutes: Combining Hedonic Pricing and Demand Systems," Working Papers 2011-07, BC3.
    4. Kirill Sosunov & Oleg Zamulin, 2006. "The Inflationary Consequences of Real Exchange Rate Targeting via Accumulation of Reserves," Working Papers w0082, New Economic School (NES).
    5. Christoph Böhringer & Thomas F. Rutherford & David G. Tarr & Natalia Turdyeva, 2017. "Market Structure and the Environmental Implications of Trade Liberalization: Russia’s Accession to the World Trade Organization," World Scientific Book Chapters, in: Trade Policies for Development and Transition, chapter 20, pages 459-485, World Scientific Publishing Co. Pte. Ltd..
    6. repec:zbw:bofitp:2006_011 is not listed on IDEAS
    7. Thomas F. Rutherford & David G. Tarr, 2014. "Regional Impacts of Liberalization of Barriers against Foreign Direct Investment in Services: The Case of Russia's Accession to the WTO," World Scientific Book Chapters, in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 7, pages 151-167, World Scientific Publishing Co. Pte. Ltd..
    8. Bajzik, Josef & Havranek, Tomas & Irsova, Zuzana & Schwarz, Jiri, 2020. "Estimating the Armington elasticity: The importance of study design and publication bias," Journal of International Economics, Elsevier, vol. 127(C).
    9. Rutherford, Thomas & Tarr, David, 2008. "Regional household and poverty effects of Russia's accession to the world trade organization," Policy Research Working Paper Series 4570, The World Bank.
    10. Josef Bajzik & Tomas Havranek & Zuzana Irsova & Jiri Schwarz, 2019. "The Elasticity of Substitution between Domestic and Foreign Goods: A Quantitative Survey," Working Papers 2019/12, Czech National Bank.
    11. Kirill Sosunov & Oleg Zamulin, 2006. "The Inflationary Consequences of Real Exchange Rate Targeting via Accumulation of Reserves," Working Papers w0082, Center for Economic and Financial Research (CEFIR).
    12. Galarraga, Ibon & González-Eguino, Mikel & Markandya, Anil, 2011. "Willingness to pay and price elasticities of demand for energy-efficient appliances: Combining the hedonic approach and demand systems," Energy Economics, Elsevier, vol. 33(S1), pages 66-74.

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    More about this item

    Keywords

    Russia; imported and import-competing domestic goods; price and income elasticities of demand; Armington elasticities; household expenditures; Russian regions; income deciles.;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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