Modelling trade in processed food products: an econometric investigation for France

This paper presents an econometric study of trade in processed food products based on French data. We use a differentiated‐product model, which captures non‐homothetic consumer preferences but also allows for testable restrictive structures such as homogeneity, homogeneous weak separability and the Armington specification. The model framework adopted is based on the constant difference of elasticities (CDE) function. The Armington assumption is rejected for the majority of products. Econometric results suggest that French consumers distinguish not only between home‐produced and imported food products but also between supplies originating from elsewhere in the European Union and imports from the rest of the world.