countries are benefited more than smaller countries from the production of the public good i.e defence, if the income elasticity … the income elasticity of marginal utility of income. …

’s model. Keywords: import demand, income elasticity, international trade, product differentiation JEL Classification: F1 … generally characterized by a higher income elasticity and U.S. exports by a lower income elasticity than imports and exports in … elasticity. These implausibly low estimates of the income elasticity under the Armington assumption are not particularly …

following equation, where η i is the income elasticity and µ ij are the uncompensated price elasticities. 2 So that changes in … “Cournot” price elasticities) plus the product of the income elasticity and the budget share, or, ε ij = u ij + η i w j , (7 … property, known as “homotheticity,” can lead to estimations where the income elasticity for necessities actually increases when …

.75) of the income elasticity (1.5). Price elasticities for the most part are estimated close to -1, which is typical for the … literature. Exclusion of the supply effect leads to overestimation of the income elasticity. Results based on U.S. exports to …