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Demand elasticity of processed food exports from developing countries: A panel analysis of U.S. imports

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  • Wanissa Suanin

Abstract

There has been a growing emphasis in resource-rich developing countries on promoting processed food exports as part of their export expansion and diversification strategy. A key issue for this strategy is whether global market conditions are conducive for significant trade gains. We estimate price and income elasticities of demand for processed food exports from developing countries using a new quarterly panel dataset for the United States, the major market for these products, over the period 1992– 2018. Our findings indicate that demand for processed food imports from developing countries has high income elasticity combined with low price elasticity. The implication is that expansion of imports is driven by demand expansion driven by income growth which counterbalances any possible negative impact of an increase in relative prices. Income elasticity of demand for processed food imports is much higher than that for unprocessed food imports, reflecting preferences for processed food.

Suggested Citation

  • Wanissa Suanin, 2020. "Demand elasticity of processed food exports from developing countries: A panel analysis of U.S. imports," Departmental Working Papers 2020-28, The Australian National University, Arndt-Corden Department of Economics.
    • Handle: RePEc:pas:papers:2020-28
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    Cited by:

    1. Sharon Raszap Skorbiansky & Monica Saavoss & Hayden Stewart, 2022. "Cow's milk still leads in the United States: The case of cow's, almond, and soy milk," Agricultural Economics, International Association of Agricultural Economists, vol. 53(2), pages 204-214, March.
    2. Renjini, V.R. & Venkatesh, Palanisamy & Nithyashree, ML & Singh, Alka, 2021. "Processed Food Export from India to European Union: Trend and Potential," 2021 Conference, August 17-31, 2021, Virtual 315306, International Association of Agricultural Economists.

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    More about this item

    Keywords

    Demand elasticity; Processed food trade; Developing countries; ARDL estimator;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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