Source–Specific Demand Elasticities for Dates in International Trade

Dates are indispensable goods for people living in arid areas because of their nutritional value for the communities residing there. Market shares for date crops growing in the Middle East and North Africa are considerable. There are a big number of articles that estimate different kinds of elasticities for various types of goods produced in the Middle East and North Africa, but very few articles mention the estimation of demand elasticities of the most important agricultural commodities such as dates in these regions. In this article, a Rotterdam model is applied for world demand for dates with a particular focus on Iraq. Major exporters of dates are used with time-series data (1961-2013). The results show that date exports have become less price elastic. For instance, point estimates range from smallest to largest price effects, -0.31 for ROW to 0.03 for Iran. The own-price elasticities indicate that world demand of date is particularly sensitive to Tunisia date price (-0.99), also the world demand is sensitive in lower degrees to the rest of countries. The marginal budget share indicates Iraq has relatively a large marginal share, which is to be expected since it is, the largest supplier of date to the world, but significantly smaller for the rest of the countries. Moreover, the results shows that estimate income elasticities are positive, so date is a normal good. The expenditure elasticities suggests that there is a degree of expenditure proportionality (almost homothetic preferences) in the world demand of date, which indicates that the average budget share for each source may not vary with the level of total expenditures.