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Abstract
The Armington procedure (AP) has become increasingly popular in agricultural trade
analyses. However, some arguments have arisen concerning the relevance of using the procedure
for such analyses. This study examines the assumptions commonly made when using
the Armington procedure and suggests modifications for agricultural trade analyses. Results
from models utilizing rice-trade data suggest that the assumptions of the single constant
elasticity, in particular, may not be appropriate for analyzing agricultural trade. These results
also suggest that, with proper modifications, the AP can be applied to agricultural trade. Further,
results of a modified Armington procedure indicate that trade in rice exports is highly
competitive and that changes in market shares of individual exporters are not independent
of changes in budget expenditure allocated to imports.