Upstream, Downstream: An Estimation of Armington Elasticities at Different Stages of Production
Year: 2025
Type: article
Abstract: This paper uses panel data on variation in trade costs to estimate elasticities of substitution for NAICS industries and Harmonized System (HS) products. I build on previous studies that estimate these elasticities by computing elasticities both for upstream and downstream products. Results show that upstream elasticities are higher than downstream elasticities, indicating that upstream product groups are more substitutable for one another than downstream product groups. Highly aggregated downstream product groups have a lower elasticity of substitution than less aggregated downstream product groups, but this pattern is more ambiguous for upstream goods. Upstream goods and downstream goods both display some signs of aggregation bias, although this bias is more pronounced in HS products than in NAICS industries.
DOI: 10.71476/y7f9-jr32
Author: Phillips, Paul
Institution: United States International Trade Commission
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W6902675979
FWCI:
Cites:
Cited by:
Related to: