• Korea Trade Review
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• v.46 no.4
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• pp.219-234
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• 2021

Armington elasticity has been a methodology for analyzing how much imports could increase in response to importing price cuts, assuming the possibility of incomplete substitution of domestic and imported products. This study calculates Armington elasticity values in Korean fisheries sector and presents an analysis method for classifying items based on price and preference differences. The model is modified reflecting the characteristics of the fisheries market along with the typical OLS, PAM, and ECM models. The result's implication is that products with a high import growth rate do not necessarily show a high Armington value, but it could be seen that price is not the only factor facilitating fisheries imports increase. Considering the items of which demand increases due to importing price cuts have an indiscriminate demand between domestic and imported products, the results could be interpreted that the Korean fisheries importing market has been easily affected by the changes in import prices. Fisheries grouping by price and preference demonstrates that explanatory variables other than price should be considered when estimating import demand.

• Journal of Korean Society of Forest Science
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• v.104 no.2
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• pp.254-260
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• 2015

This paper assesses the tariff reduction on imported wood products that will have impact on the demand for domestic wood products in South Korea, by estimating the Armington substitution elasticities based on the assumption that they are imperfect substitutes. Results indicate that domestic and foreign wood products are far from perfect substitutes to each other. The substitution elasticities in plywood and fiberboard appeared to be high, implying that tariff reduction may have negative effects on those industries. On the contrary, imported and domestic particleboard showed a low substitution elasticity. The decline of fiberboard industry may lead to the decline in forestry since fiberboard is produced mainly by thinned woods supplied from domestic forests. Therefore, effective countermeasures to enhance the competitiveness of wood products industry are needed to cope with the market opening.