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Demand elasticity of processed food exports from developing countries: A panel analysis of U.S. imports

Wanissa Suanin

Departmental Working Papers from The Australian National University, Arndt-Corden Department of Economics

Abstract: There has been a growing emphasis in resource-rich developing countries on promoting processed food exports as part of their export expansion and diversification strategy. A key issue for this strategy is whether global market conditions are conducive for significant trade gains. We estimate price and income elasticities of demand for processed food exports from developing countries using a new quarterly panel dataset for the United States, the major market for these products, over the period 1992– 2018. Our findings indicate that demand for processed food imports from developing countries has high income elasticity combined with low price elasticity. The implication is that expansion of imports is driven by demand expansion driven by income growth which counterbalances any possible negative impact of an increase in relative prices. Income elasticity of demand for processed food imports is much higher than that for unprocessed food imports, reflecting preferences for processed food.

Keywords: Demand elasticity; Processed food trade; Developing countries; ARDL estimator (search for similar items in EconPapers)
JEL-codes: F14 Q11 Q17 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2020
New Economics Papers: this item is included in nep-agr and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:pas:papers:2020-28

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