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An Empirical Estimation Of The Import Demand Model And Welfare Effects: The Case Of Rice Importing Countries


  • Kang, Hyunsoo
  • Kennedy, P. Lynn
  • Hilbun, Brian M.


This analysis presents the determination of an import demand function for the world rice market using annual data from 1994 to 2007. In the specification and analysis of a world rice market import demand function, Ordinary Least Square (OLS), Instrumental Variables (IV) with Generalized Method of Moments (GMM), and Seemingly Unrelated Regression (SUR) methods have been used. Social welfare effects have been obtained using consumer surplus and compensated variation for the top four rice importing countries (Indonesia, Philippines, Nigeria, and Saudi Arabia). Empirical results suggest that economic growth, Foreign Direct Investment (FDI), and importing countries’ population positively affect national income, thus, positively affecting rice consumption. Oil price has a strong effect on the domestic rice prices in importing countries. This paper also estimates the social effects arising from increased rice export prices and examines how consumer surplus is affected in major rice importing countries.

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  • Kang, Hyunsoo & Kennedy, P. Lynn & Hilbun, Brian M., 2009. "An Empirical Estimation Of The Import Demand Model And Welfare Effects: The Case Of Rice Importing Countries," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46082, Southern Agricultural Economics Association.
  • Handle: RePEc:ags:saeana:46082

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    References listed on IDEAS

    1. Richard E, Just & Darrell L. Heuth & Andrew Schmitz, 2004. "The Welfare Economics of Public Policy," Books, Edward Elgar Publishing, number 3342.
    2. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, January.
    3. Deyak, Timothy A & Sawyer, W Charles & Sprinkle, Richard L, 1989. "An Empirical Examination of the Structural Stability of Disaggregated U.S. Import Demand," The Review of Economics and Statistics, MIT Press, vol. 71(2), pages 337-341, May.
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    rice export and import; consumer surplus; trade; import demand function; International Relations/Trade;

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