The U.S. demand for imported and domestically produced foods: An investigation of intertemporal and substitution effects

This article extends the literature on time series estimation of U.S. consumer demand by presenting a coherent theoretical structure with a multi-period planning horizon for consumer choice and a more general treatment of the aggregation problem that allows the possibility that consumers' tastes change over time and vary across individuals. Based on our theoretical model, an econometric model is used to obtain estimates in a multi-period context of U.S. demand for imported foods and domestically produced foods. The hypothesis that current purchases depend on expected future prices is supported by the empirical results for imported foods.     

U.S. Canned Tuna Supply and Demand

Abstract

A 3SLS econometric model is used to estimate price elasticities of supply and demand for domestically produced and imported canned tuna in the U.S. market. In addition, a VAR model is developed to examine the relations between imports and domestically produced canned tuna. For domestically produced canned tuna, a 3SLS estimation of a structural econometric model yielded a coefficient for price elasticity of supply of 0.2 and of own-price demand of ?0.3. Such price inelasticities are expected of a fishery exploited at or near its maximum yields (inelastic supply), and a consumer product widely viewed as almost a necessity in a well-stocked pantry (inelastic demand). In addition, the model yielded a cross-price elasticity of demand with respect to the price of imported canned tuna of 0.45. Additional results include an income elasticity U.S. demand for domestically packed tuna of 0.83; a cross-price elasticity with the price of bread (a complement) of ?0.33, a cross-price elasticity for the price of ground meat (a substitute) of 0.30. With respect to imported canned tuna in the U.S. market, the corresponding elasticities estimated in the model are ?1.3 (own-price demand), 3.5 (income elasticity), ?1.2 (cross-price with the price of bread) and 2.5 (cross-price with the price of ground meat).

For canned tuna company managers, the results provide useful information about the likely effects on sales that would come from their own price changes, from changes in the price of imported canned tuna, and from price changes in the markets for complementary and substitute products. They can also use our results in discussions with U.S. trade negotiators, who are frequently faced with disputes over tariffs, market access, and other trade issues.     

Does Food Safety Information Impact U.S. Meat Demand?

A theoretical model of consumer response to publicized food safety information on meat demand is developed with an empirical application to U.S. meat consumption. Evidence is found for the existence of pre-committed levels of consumption, seasonal factors, time trends, and contemporaneous own- and cross-commodity food safety concerns. The average demand response to food safety concerns is small, especially in comparison to price effects, and to previous estimates of health related issues. This small average effect masks periods of significantly larger responses corresponding with prominent food safety events, but these larger impacts are short-lived with no apparent food safety lagged effects on demand.     

U.S. Citrus Import Demand: Seasonality and Substitution

Citrus fruits make up 1/5 of all fresh fruit consumed in the United States. Given the increasing importance of imported citrus in the diet of American consumers, it is perhaps surprising that no import demand analysis of U.S. citrus has been conducted. Using quarterly U.S. import data for 6 citrus commodities, we employed a demand systems model and evaluated aspects of seasonality. The results suggest wide variations in price responses to different types of imported citrus. The average amplitude and phase shift suggest that all citrus fruits exhibit some seasonality in their imports, likely a result of peak harvesting schedules of exporters.     

Comparing heterogeneous consumption in U.S. and Japanese meat and fish demand

This article uses national, quarterly data to conduct an empirical analysis of pre‐committed meat and fish demand by U.S. and Japanese households using the generalized almost ideal demand system (GAIDS). Pre‐committed demand represents the component of demand that is insensitive to both income and price adjustments. U.S. consumers are found to hold significant positive pre‐committed demand for beef and pork, while Japanese consumers appear to possess significant, positive pre‐committed demand for beef and fish. This provides evidence to partially explain observed differences in Japanese and U.S. consumer reactions to nonprice and nonincome effects in beef, pork, poultry, and fish. In addition, based on in‐ and out‐of‐sample performance, the more general GAIDS is preferred to the almost ideal demand system (AIDS) for both the U.S. and Japanese demand systems. Results lend to improved demand modeling efforts and more complete understanding of true market forces at hand in meat and fish markets for these culturally diverse consumer groups.     

The consequences of a human food pathogen vaccine on food demand: a calibrated partial‐equilibrium analysis of the U.S. beef market

Human vaccines against several common foodborne pathogens are being developed and could substantially alter consumer and producer behaviour in the markets for foods commonly afflicted by these pathogens. To understand the possible impacts of such an innovation, we derive and calibrate a partial‐equilibrium model using parameters for consumer vaccine uptake from stated‐preference work under an array of assumptions concerning industry moral hazard, consumer awareness and alternative preventive effort exercised by consumers. We simulate three scenarios in the U.S. beef sector: the introduction of a vaccine, the tightening of pathogen standards for beef production and the simultaneous introduction of both vaccinations and tighter standards. Our simulation shows that all policies can increase aggregate surplus given most calibrations; though, the largest effects are attributed to vaccine introductions, which reduce expected damages from foodborne illness among vaccinated consumers without shifting firm costs. However, unaware consumers and aware consumers who choose not to vaccinate experience no change in expected damages when a vaccine is introduced but face a higher price of food because of the stronger demand of food from vaccinated consumers.     

Consumers’ preferences for fresh broccolis: interactive effects between country of origin and organic labels

While international trade in organic products has grown significantly, understanding consumers’ preferences for imported organic foods has remained limited. This research examines the impact of country‐of‐origin labeling on US consumers’ choices of organic foods. Results show that consumer valuation of domestically produced organic broccoli was significantly higher than that of imported organic broccoli. Adding information about USDA organic certification standards/rules for imported products mildly increases consumer valuation of imported organic broccoli in some cases. These findings suggest that providing such information may have a positive impact on consumer willingness to purchase imported organic products.     

Aquaculture imports from Asia: an analysis of U.S. consumer demand for select food quality attributes

The increasing share of imported food in the United States, coupled with highly publicized incidents of food contamination and adulteration in Asia, particularly China, is posing new challenges for consumers and food safety regulators. In this study, we focus on imported shrimp and tilapia, to evaluate consumer willingness‐to‐pay (WTP) for enhanced food safety, use of antibiotics, and eco‐friendly environmental practices. Results show that U.S. consumers were willing‐to‐pay more for enhanced food safety, followed by the use of no antibiotics and environmental friendly production practices. American consumers in our sample were found to have a higher WTP for domestic products and placed more trust on U.S. government verification of product attributes followed by third‐party certification.     

Milk by Any Other Name … Consumer Benefits from Labeled Milk

This article uses revealed preferences of consumers to study the consumer benefits from rBST-free and organic labeled milk. The article specifies and estimates a quadratic AIDS demand system model for different milk types using U.S. supermarket scanner data. The introduction of rBST-free and organic milk is used to estimate consumer benefits that are decomposed into two components, competitive and variety effects. Results show significant consumer benefits from organic milk and to a lesser extent from rBST-free milk. Based on the findings, we explore implications for present U.S. labeling standards.     

THE SHORT-RUN IMPACT OF BEEF IMPORTS ON U.S. MEAT PRICES

This paper contains short-run estimates of the impact of beef imports from Australia and elsewhere on U.S. retail meat prices. The U.S. beef demand is separated into two categories, table cuts and processed items. Estimates of direct and cross price elasticities of demand for these products are used together with elasticity estimates for other meats and other foods to assess the effect of imports on prices and upon various portions of the Consumer Price Index.     

Estimating the U.S. Import Demand for Melons: A Dynamic Analysis Approach

The United States is one of the world's leading consumers as well as one of the world's leading producers of melons. However, U.S. melons are produced only from May through December. In order to supplement the domestic demand and make melons available year-round, the United States imports melons from Latin American countries. This article analyzes the U.S. demand for imported fresh and frozen melons using monthly data on import volumes and values. A static and a dynamic linear Almost Ideal Demand System are estimated using Seemingly Unrelated Regression (SUR). The estimated parameters are used to estimate the short- and long-run price and expenditure elasticities.     

A Microeconometric Analysis of the U.S. Meat Demand

Price and expenditure elasticities and estimates of the effect of household demographic variables on U.S. meat demand are estimated using the newly released 1987–88 USDA household food consumption survey data. The USDA survey for the first time included variables reflecting respondents' concerns for health and diet information. A hybrid demand system, which combines a modified generalized addilog system and a level version Rotterdam demand system, is developed as the analytical framework. The micro econometric analysis takes into consideration the consumer selection problem, the missing-price problem, and the aggregation and quality variation problem. The most significant household characteristic and socio-economic variables are region, ethnic background, household size, urbanization, food planner, received health information, female household head employment status and proportion of food expenditure on away-from-home consumption. The results support the speculation of other time-series meat demand studies claiming both health concerns and convenience are the reasons for changes in consumer preference in favor of poultry and fish and in disfavor of red meat.     

Agricultural Trade among NAFTA Countries: A Case Study of U.S. Meat Exports

The U.S. NAFTA partners are important markets for U.S. meat exports. A source-differentiated almost ideal demand system is used in this study to estimate meat demand in Canada and Mexico. Empirical results suggest that while a U.S. price increase in the Canadian market is expected to increase U.S. sales revenues; it would decrease sales revenues in the Mexican market. Furthermore, an increase in meat expenditures in Canada and Mexico is expected to increase the demand for U.S. meats, while the bovine spongiform encephalopathy outbreaks have had a negative effect on U.S. and Canadian beef market shares. Finally, a decomposition of the causes of changes in demand for U.S. meats over time is performed.     

Substitution between U.S. and Canadian Wheat by Class

The imports of hard red winter and durum wheat from Canada has been a source of contention among U.S. wheat growers, due to the likeness between domestic and imported Canadian wheat. This has also been investigated as a source of material injury to the U.S. market. We examine the relative substitution between U.S. and Canadian wheat, by class, by treating wheat as an input in flour production. We find that while U.S. hard red spring wheat and U.S. hard red winter wheat are economic substitutes, there is limited price substitution between U.S. and Canadian durum and U.S. and Canadian hard red spring wheat. Quality differences from the millers’ perspective may be the reason driving the import demand for hard red spring and durum wheat from Canada. Les importations de blé de force rouge d'hiver et de blé dur en provenance du Canada sont une source de conflit chez les producteurs de blé des États‐Unis, en raison de la ressemblance entre le blé produit aux États‐Unis et le blé importé du Canada. Ce point, jugé comme une source de préjudice important au marchéétatsunien, a également fait l'objet d'une enquête. Nous avons examiné la substitution relative du bléétatsunien et canadien, selon la classe, en traitant le blé comme un intrant dans la production de farine. Nos résultats ont indiqué que, bien que le blé de force roux de printemps et le blé de force rouge d'hiver soient des substituts économiques, la substitution en raison du prix demeure limitée entre le blé dur étatsunien et canadien et entre le blé de force roux de printemps étatsunien et canadien. Les différences de qualité perçues par les meuniers pourraient être la raison qui stimule la demande d'importation de blé de force roux du printemps et de blé dur en provenance du Canada.     

Editorial

An Almost Ideal Demand System (AIDS) was utilized to model the United States demand for domestic and imported tobaccos. The model, which includes equations for domestic flue-cured tobacco, domestic air-cured (burley) tobacco, oriental tobacco, and imported flue-cured and burley tobacco, incorporates the impact of economic factors as well as changes in consumer tastes. In this model homogeneity was rejected under certain conditions, but symmetry could not be rejected. These results suggest that imported flue-cured and burley tobacco, to a limited extent, is a substitute for domestic flue-cured tobacco and is a complement for domestic air-cured tobacco. The trend toward lower average nicotine content of domestic cigarettes is shown to have a detrimenta1 effect on the demand for domestic flue-cured tobacco, but a beneficial impact on domestic air-cured (burley), and imported oriental tobaccos.     

A new market for an old food: the U.S. demand for olive oil

While U.S. consumption of olive oil has tripled over the past two decades, nearly all olive oil continues to be imported. Estimation of a demand system using monthly import data reveals that the income elasticity for virgin oils sourced from EU is above one, but demand for nonvirgin oils is income‐inelastic. The demand for olive oil as a single product is price‐inelastic. Differentiated by product characteristic and origin, olive oils are highly substitutable with each other but not with other vegetable oils. News about the health and culinary benefits of olive oil and the spread of Mediterranean diet contribute significantly to the rising demand.     

Import and Retail Demand for Orange Juice in Canada

A six-equation structural model of the retail and import level demand for orange juice in Canada is estimated. Relative prices of Brazilian and U.S. imports are found to he important determinants of the quantity imported to Canada, and the Canadian market share for the U. S. and Brazil. Retail demand for orange juice in Canada is estimated to he price inelastic. The import level demand for U. S. product is estimated to he price inelastic while the import level demand for Brazilian product is estimated to he highly elastic. The final form of the model is used to simulate competitive price situations in the Canadian market.
On a fail un modèle eslimatif en six équations de la demande d'imponation el de vente au détail pour le jus d'orange au Canada. On a trouvé que les prix relatifs des importations brésiliennes et américaines jouent un rôle déterminant dans la quantilé d'importations sur le marché canadien et dans les titres floltants canadiens pour les Etats Unis et le Brésil. On estime que la demande, au niveau des détaillanls, pour le jus d'orange au Canada représente un prix fixe. On estime que la demande d'importations en produils brésiliens est des plus élastiques. On emploie la forme finale du modèle pour simuler les prix concurrents sur le marché canadien.     

The Impact of Groundfish Imports on the United States Fishing Industry: An Empirical Analysis

This paper presents an economic analysis of the issue of United States-Canadian groundfish trade. Using an econometric model the parameters of consumer demand for United States domestic and imported groundfish products are estimated. The model is then used to evaluate the potential impact of countervailing duties leveled against imported fish products. It is found that while such duties would likely increase consumer prices for fish in the United States the fisherman's prices would not increase proportionately. The net protective effect to the United States harvesting sector of such tariffs thus seems minimal.     

The U.S. Sugar Policy Reforms and World Sugar Trade

This article incorporates the U.S. sugar policy instruments in a spatial Nash equilibrium model of world sugar trade and simulates the consequences of the U.S. sugar policy reforms on sugar trade among major producing and consuming regions of the world. The results show that policy reforms which eliminate import barriers by the U.S. can lead to major changes in the directions and volumes of sugar trade. Specifically, U.S. sugar imports would increase but domestic production and consumer prices would decline. Several regions in the developing world would increase their shares of the world sugar export trade.     

Consumer demand for diet quality: evidence from the healthy eating index

Few studies have been performed to use the detailed healthy eating index (HEI) to estimate consumer demand for diet quality. In this article, we apply household production theory to systematically estimate consumer demand for diet quality using the HEI developed by the U.S. Department of Agriculture. The results show that consumers have insufficient consumption of food containing dark green and orange vegetables, legumes and whole grains. Age and education have a significant impact on consumer demand for diet quality, but income does not. The own‐price elasticities of demand for diet quality are inelastic. Simulation of tax scenarios indicates that a tax on sugar‐sweetened beverage may be more efficient than a tax on fats, oils and salad dressing in improving consumer diet quality. This information is critical for policies and programs that are designed to improve healthy food choices, thereby reducing the social cost of public health.