European Demand for Orange Juice
The demand for OJ in Europe, and in particular the own-price elasticity of demand, has been difficult to estimate due to lack of good data. Europe, however, is the largest OJ market in the world (USDA, Foreign Agricultural Service), and cannot be ignored in analyzing the U.S. and Florida OJ situations, given OJ is an internationally traded commodity. Thus, estimates of the impacts of factors such as own-price on Europe’s OJ demand are critical for understanding the market. The estimates in this study, although rough, provide some guidance for the magnitude of the price response in Europe, but to keep them in perspective, they are based on a relatively small number of observations and a proxy variable, suggesting that, as more and hopefully better data become available, further research on this topic are needed.
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