Abstract
The Armington substitution elasticity is a key parameter for trade-policy analysis. We estimate short- and long-run Armington elasticities for 309 manufacturing industries at the four-digit Standard Industrial Classification (SIC) level over the period 1989–1995. Our estimation results offer a comprehensive, disaggregated, and up-to-date set of Armington elasticities. On average, long-run estimates are approximately two times larger than the short-run estimates, which is important since long-run estimates are more appropriate for most trade-policy analysis. Also, statistically significant differences exist within most three-digit SIC categories, which highlights the importance of estimation at a disaggregated level.
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