AN EMPIRICAL ESTIMATION OF THE IMPORT DEMAND MODEL AND WELFARE EFFECTS: THE CASE OF RICE IMPORTING COUNTRIES

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

No 46082, 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia from Southern Agricultural Economics Association

Abstract: 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.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 24
Date: 2009-01
New Economics Papers: this item is included in nep-afr, nep-int and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:ags:saeana:46082

DOI: 10.22004/ag.econ.46082

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