IDEAS home Printed from https://ideas.repec.org/a/taf/apeclt/v20y2013i5p446-451.html
   My bibliography  Save this article

Estimating import demand in the presence of seasonal trade and unobserved prices

Author

Listed:
  • Andrew Muhammad

Abstract

Estimating import demand is particularly difficult when trade is seasonal because prices do not exist for observations with no recorded transaction. Fresh apple imports in the United Kingdom provide a perfect case of this particular problem due to periodic trade. In this study, the differenced version of the almost ideal demand system is employed for estimating import demand by source and an iterative procedure is developed for deriving choke prices (prices at which imports are zero) and import demand estimates. The appeal of this procedure is that the final estimates and choke prices are not sensitive to the starting values used for the initial estimation. When comparing the results of the choke price procedure to a more traditional approach of eliminating zeros by aggregating across countries, significant differences emerge. Results clearly show that the aggregate estimates do not adequately reflect the pattern of UK imports from seasonal suppliers.

Suggested Citation

  • Andrew Muhammad, 2013. "Estimating import demand in the presence of seasonal trade and unobserved prices," Applied Economics Letters, Taylor & Francis Journals, vol. 20(5), pages 446-451, March.
    • Handle: RePEc:taf:apeclt:v:20:y:2013:i:5:p:446-451
    DOI: 10.1080/13504851.2012.709595
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13504851.2012.709595
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13504851.2012.709595?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Barten, A. P., 1969. "Maximum likelihood estimation of a complete system of demand equations," European Economic Review, Elsevier, vol. 1(1), pages 7-73.
    2. Lee, Lung-Fei & Pitt, Mark M, 1986. "Microeconometric Demand Systems with Binding Nonnegativity Constraints: The Dual Approach," Econometrica, Econometric Society, vol. 54(5), pages 1237-1242, September.
    3. James L. Seale & Mary A. Marchant & Alberto Basso, 2003. "Imports versus Domestic Production: A Demand System Analysis of the U.S. Red Wine Market," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(1), pages 187-202.
    4. Carlos Arnade & Daniel Pick & Munisamy Gopinath, 2010. "Demand estimation when some prices are unobserved: an application to fresh lettuce," Applied Economics Letters, Taylor & Francis Journals, vol. 17(17), pages 1641-1646.
    5. Carlos Arnade & Daniel Pick & Mark Gehlhar, 2005. "Testing and incorporating seasonal structures into demand models for fruit," Agricultural Economics, International Association of Agricultural Economists, vol. 33(s3), pages 527-532, November.
    6. Diansheng Dong & J.S. Shonkwiler & Oral Capps, 1998. "Estimation of Demand Functions Using Cross-Sectional Household Data: The Problem Revisited," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 466-473.
    7. BARTEN, Anton P., 1969. "Maximum likelihood estimation of a complete system of demand equations," LIDAM Reprints CORE 34, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    8. Chalfant, James A, 1987. "A Globally Flexible, Almost Ideal Demand System," Journal of Business & Economic Statistics, American Statistical Association, vol. 5(2), pages 233-242, April.
    9. Toshinobu Matsuda, 2005. "Differential Demand Systems: A Further Look at Barten's Synthesis," Southern Economic Journal, John Wiley & Sons, vol. 71(3), pages 607-619, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Arnade, Carlos & Kuchler, Fred, 2015. "Measuring the Impacts of Off-Season Berry Imports," Economic Research Report 229201, United States Department of Agriculture, Economic Research Service.
    2. Andrew Muhammad & S. Aaron Smith & Tun‐Hsiang Edward Yu, 2021. "COVID‐19 and cotton import demand in China," Agribusiness, John Wiley & Sons, Ltd., vol. 37(1), pages 3-24, January.
    3. Byung Min Soon & Jarrett Whistance, 2019. "Seasonal Soybean Price Transmission between the U.S. and Brazil Using the Seasonal Regime-Dependent Vector Error Correction Model," Sustainability, MDPI, vol. 11(19), pages 1-9, September.
    4. Seale, James L. Jr. & Zhang, Lisha & Traboulsi, Mohamad R., 2013. "Domestic and Foreign Sources of U.S. Demand for Fresh Vegetables and Fruits," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150769, Agricultural and Applied Economics Association.
    5. Heng, Yan & House, Lisa A., 2017. "Do U.S. Suppliers Benefit from South Korea-U.S. Free Trade Agreement? The Case of Orange Juice," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258396, Agricultural and Applied Economics Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fengxia Dong & Frank Fuller, 2010. "Dietary Structural Change in China's Cities: Empirical Fact or Urban Legend?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(1), pages 73-91, March.
    2. Okrent, Abigail M. & Alston, Julian M., 2012. "The Demand for Disaggregated Food-Away-from-Home and Food-at-Home Products in the United States," Economic Research Report 132469, United States Department of Agriculture, Economic Research Service.
    3. Moschini, G. & Moro, D., 1993. "A Food demand System for Canada," Papers 1-93, Gouvernement du Canada - Agriculture Canada.
    4. Marc-Andreas Muendler & Sascha O. Becker, 2010. "Margins of Multinational Labor Substitution," American Economic Review, American Economic Association, vol. 100(5), pages 1999-2030, December.
    5. James L. Seale & Mary A. Marchant & Alberto Basso, 2003. "Imports versus Domestic Production: A Demand System Analysis of the U.S. Red Wine Market," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(1), pages 187-202.
    6. Sulgham, Anil K. & Zapata, Hector O., 2006. "A Dynamic Approach to Estimate Theoretically Consistent US Meat Demand System," 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida 35441, Southern Agricultural Economics Association.
    7. Andrew Muhammad & S. Aaron Smith & Tun‐Hsiang Edward Yu, 2021. "COVID‐19 and cotton import demand in China," Agribusiness, John Wiley & Sons, Ltd., vol. 37(1), pages 3-24, January.
    8. Kesavan, Thulasiram, 1988. "Monte Carlo experiments of market demand theory," ISU General Staff Papers 198801010800009854, Iowa State University, Department of Economics.
    9. Rodrigo García Arancibia & Edith Depetris Guiguet, 2020. "Brazilian Import Demand of Dairy Products with Emphasis in the Mercosul Context [Demanda brasileira de importações de laticínios com ênfase no contexo do Mercosul]," Nova Economia, Economics Department, Universidade Federal de Minas Gerais (Brazil), vol. 30(2), pages 551-577, May-Augus.
    10. Ahn, Hyungdo, 1989. "Meat demand in Korea," ISU General Staff Papers 1989010108000017565, Iowa State University, Department of Economics.
    11. Canali, Gabriele, 1990. "Demand for meats in European Community member countries: a systems approach," ISU General Staff Papers 1990010108000017621, Iowa State University, Department of Economics.
    12. Muhammad, Andrew & Leister, Amanda M. & McPhail, Lihong & Chen, Wei, 2014. "The evolution of foreign wine demand in China," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(3), July.
    13. Richards, Timothy J. & Kagan, Albert & Gao, Xiaoming, 1997. "Factors Influencing Changes In Potato And Potato Substitute Demand," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 26(1), pages 1-15, April.
    14. Karel JANDA & Jakub MIKOLÁŠEK & Martin NETUKA, 2010. "Complete almost ideal demand system approach to the Czech alcohol demand," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 56(9), pages 421-434.
    15. Kehar Singh & Madan M. Dey & Prasanna Surathkal, 2014. "Seasonal and Spatial Variations in Demand for and Elasticities of Fish Products in the United States: An Analysis Based on Market-Level Scanner Data," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 62(3), pages 343-363, September.
    16. Toshinobu Matsuda, 2005. "Differential Demand Systems: A Further Look at Barten's Synthesis," Southern Economic Journal, John Wiley & Sons, vol. 71(3), pages 607-619, January.
    17. Alston, Julian M. & Chalfant, James A. & Rhamezani, Ahmand, 1991. "Testing the Translog and Almost Ideal Specifications in Demand Systems," 1991 Annual Meeting, August 4-7, Manhattan, Kansas 271253, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Guang Wan, 1998. "Linear estimation of the nonlinear almost ideal demand system: a Monte Carlo study," Applied Economics Letters, Taylor & Francis Journals, vol. 5(3), pages 181-186.
    19. Seale, James L. Jr. & Zhang, Lisha & Traboulsi, Mohamad R., 2013. "Domestic and Foreign Sources of U.S. Demand for Fresh Vegetables and Fruits," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150769, Agricultural and Applied Economics Association.
    20. Barnett, William A. & Serletis, Apostolos, 2008. "Consumer preferences and demand systems," Journal of Econometrics, Elsevier, vol. 147(2), pages 210-224, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:apeclt:v:20:y:2013:i:5:p:446-451. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEL20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.