Demand analysis with structural changes: Model and application to the US blueberry market

This study proposes a generalized demand system accommodating structural changes endogenously and examines how increasing imports affect blueberry prices and shipment values in the US market. Specifically, we integrate a smooth transformation function into the nested synthetic inverse demand system model (SIDS). We show that the proposed approach performs better than the standard SIDS in the context of structural changes in imports in the US blueberry market. As the largest blueberry producer in the world, the United States has supplied half of the world's blueberries over the past decade. Imported blueberries from South American countries do not have large impacts on the US blueberry industry due to the difference in production seasons. But the fast‐growing imports from Mexico have had great impacts on the US market. Our simulation shows that a 100% increase in Mexican blueberry shipments will result in a loss of $20 million in US domestic production. [EconLit Citations: Q11, Q17].