Estimation of the demand elasticities of imports (1980-2017), A Comparative Study between Algeria and Morocco

Abstract

The objective of the study of this subject was to estimate and compare the elasticities of import demand between Algeria and Morocco. And according to estimating the confidence interval for the difference between the arithmetic means and the proportion between the two variances, so the annual values of Algerian imports exceed Moroccan imports, the import unit value index is lower, the real income is greater, and the relative prices of imports are higher. And according to the ARDL model in the period 1980-2017, for similarities, significant elasticities were estimated (cross and income elasticity) in the long-term. As for the differences, significant elasticities were estimated (price and cross elasticity) for Morocco in the short-term, with estimation of weak elasticities for Algeria in the short-term. So in order to reduce the elasticities in the long term for both countries, and to reduce demand for foreign goods and services, it is necessary to diversify and develop domestic production.