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A Dynamic Application of the AIDS Model to Import Demand for Tropical Fresh Fruits in the USA

  • Nzaku, Kilungu
  • Houston, Jack E.
  • Fonsah, Esendugue Greg

We estimate a dynamic version of an almost ideal demand system (AIDS) model for U.S.A. imports of fresh tropical fruits: bananas, pineapples, avocadoes, papayas, mangoes/guavas, grapes and other fresh fruit imports. An error correction model specification is justified after unit root and cointegration test results confirm nonstationarity and cointegration of the data. Estimated income elasticities show that fresh grapes and other fresh fruit imports appear to be considered luxury commodities. All own-price elasticities were negative and significant. While imported bananas, pineapples, U.S.A. grapes and other fresh fruit were quite inelastic, demand for papayas and mangoes/guavas were elastic. Fresh fruits that are shown to be complementary to imported fruits include bananas, imported grapes, U.S.A. grapes and avocados, and imported avocados/other fresh fruits. Key

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File URL: http://purl.umn.edu/126721
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Paper provided by International Association of Agricultural Economists in its series 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil with number 126721.

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Date of creation: 29 Jun 2012
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Handle: RePEc:ags:iaae12:126721
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