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Estimating Import Demand for Fresh Citrus. Gary D. Thompson Almuhanad Melhim The University of Arizona. Linda Calvin Economic Research Service. Why Study Import Demand?. Quantify Impacts of SPS Measures: Elasticities (Own- & Cross-Price) Flexibility Estimates - PowerPoint PPT Presentation
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Gary D. ThompsonGary D. Thompson
Almuhanad MelhimAlmuhanad Melhim
The University of ArizonaThe University of Arizona
Gary D. ThompsonGary D. Thompson
Almuhanad MelhimAlmuhanad Melhim
The University of ArizonaThe University of Arizona
Estimating Import Estimating Import Demand Demand
for Fresh Citrusfor Fresh Citrus
Estimating Import Estimating Import Demand Demand
for Fresh Citrusfor Fresh Citrus
Linda CalvinLinda Calvin
Economic Research ServiceEconomic Research Service
Linda CalvinLinda Calvin
Economic Research ServiceEconomic Research Service
Why Study Import Why Study Import Demand?Demand?
Why Study Import Why Study Import Demand?Demand?
Quantify Impacts of SPS Measures:Quantify Impacts of SPS Measures:
Elasticities (Own- & Cross-Price)Elasticities (Own- & Cross-Price)
Flexibility EstimatesFlexibility Estimates
Estimate Welfare of Impacts SPSEstimate Welfare of Impacts SPS
Quantify Impacts of SPS Measures:Quantify Impacts of SPS Measures:
Elasticities (Own- & Cross-Price)Elasticities (Own- & Cross-Price)
Flexibility EstimatesFlexibility Estimates
Estimate Welfare of Impacts SPSEstimate Welfare of Impacts SPS
Characteristics of SPS Characteristics of SPS MeasuresMeasures
Characteristics of SPS Characteristics of SPS MeasuresMeasures
Clementines from SpainClementines from Spain
Country- & Even Region-SpecificCountry- & Even Region-Specific
Date-SpecificDate-Specific
Aggregated Data Not AppropriateAggregated Data Not Appropriate
Clementines from SpainClementines from Spain
Country- & Even Region-SpecificCountry- & Even Region-Specific
Date-SpecificDate-Specific
Aggregated Data Not AppropriateAggregated Data Not Appropriate
0
5000
10000
15000
20000
25000
SpainSpainSpainSpain
S. AfricaS. AfricaS. AfricaS. Africa AustraliaAustraliaAustraliaAustralia MoroccoMoroccoMoroccoMorocco
U.S. Mandarin Imports, U.S. Mandarin Imports, 2000-032000-03
U.S. Mandarin Imports, U.S. Mandarin Imports, 2000-032000-03
Source: FATUSSource: FATUSSource: FATUSSource: FATUS
Supply Side Drives Supply Side Drives AvailabilityAvailability
Supply Side Drives Supply Side Drives AvailabilityAvailability
Clementines from SpainClementines from Spain
Zero Import Quantity Zero Import Quantity No Import Price No Import Price
UnobservUnobservableable, Not Unobserv, Not Unobserveded
Not Censoring; Partial Truncation: Not Censoring; Partial Truncation:
Missing Price & QuantityMissing Price & Quantity
Micro-Data Censoring Models Not AppropriateMicro-Data Censoring Models Not Appropriate
Clementines from SpainClementines from Spain
Zero Import Quantity Zero Import Quantity No Import Price No Import Price
UnobservUnobservableable, Not Unobserv, Not Unobserveded
Not Censoring; Partial Truncation: Not Censoring; Partial Truncation:
Missing Price & QuantityMissing Price & Quantity
Micro-Data Censoring Models Not AppropriateMicro-Data Censoring Models Not Appropriate
Possible Approaches to Possible Approaches to TruncationTruncation
Possible Approaches to Possible Approaches to TruncationTruncation
Incidental TruncationIncidental Truncation
Sample selection is typically cross-Sample selection is typically cross-sectional.sectional.
Sample selection of import availability Sample selection of import availability depends on agro-climatic factors depends on agro-climatic factors
(e.g. weather throughout the year)(e.g. weather throughout the year)
Incidental TruncationIncidental Truncation
Sample selection is typically cross-Sample selection is typically cross-sectional.sectional.
Sample selection of import availability Sample selection of import availability depends on agro-climatic factors depends on agro-climatic factors
(e.g. weather throughout the year)(e.g. weather throughout the year)
Truncation & Demand Truncation & Demand SystemsSystems
Truncation & Demand Truncation & Demand SystemsSystems
Multiple selectivity equations + Multiple selectivity equations + Demand system equationsDemand system equations
Cross-Sectional - Sequential Cross-Sectional - Sequential Selectivity Models (Lahiri & Song)Selectivity Models (Lahiri & Song)
Multiple selectivity equations + Multiple selectivity equations + Demand system equationsDemand system equations
Cross-Sectional - Sequential Cross-Sectional - Sequential Selectivity Models (Lahiri & Song)Selectivity Models (Lahiri & Song)
0
5,000
10,000
15,000
20,000
25,000
30,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MandarinsMandarinsMandarinsMandarins
OrangesOrangesOrangesOranges
TangerinesTangerinesTangerinesTangerines
Partial Truncation at Partial Truncation at Product LevelProduct Level
Partial Truncation at Partial Truncation at Product LevelProduct Level
Selectivity Equations: Selectivity Equations: Probit/LogitProbit/Logit
Selectivity Equations: Selectivity Equations: Probit/LogitProbit/Logit
Binary Regression:Binary Regression:
Dep. Vbl. = 0 if no importsDep. Vbl. = 0 if no imports
= 1 if positive imports= 1 if positive imports
Exp. Vbls.: Temperature; PrecipitationExp. Vbls.: Temperature; Precipitation
in Production Region in Production Region
Binary Regression:Binary Regression:
Dep. Vbl. = 0 if no importsDep. Vbl. = 0 if no imports
= 1 if positive imports= 1 if positive imports
Exp. Vbls.: Temperature; PrecipitationExp. Vbls.: Temperature; Precipitation
in Production Region in Production Region
Marshallian Demand Marshallian Demand EquationsEquations
Marshallian Demand Marshallian Demand EquationsEquations
Incomplete Demand SystemIncomplete Demand System
LINQUAD: LINQUAD:
Weak integrability guarantees reliable Weak integrability guarantees reliable elasticity and welfare measures.elasticity and welfare measures.
Incomplete Demand SystemIncomplete Demand System
LINQUAD: LINQUAD:
Weak integrability guarantees reliable Weak integrability guarantees reliable elasticity and welfare measures.elasticity and welfare measures.
Demand Equations + Demand Equations + TruncationTruncation
Demand Equations + Demand Equations + TruncationTruncation
Introduce Correction for Partial Introduce Correction for Partial Truncation as Demographic Shifter Truncation as Demographic Shifter in LINQUAD:in LINQUAD:
Not just inverse Mills ratioNot just inverse Mills ratio
Multivariate normal is maintainedMultivariate normal is maintained
Introduce Correction for Partial Introduce Correction for Partial Truncation as Demographic Shifter Truncation as Demographic Shifter in LINQUAD:in LINQUAD:
Not just inverse Mills ratioNot just inverse Mills ratio
Multivariate normal is maintainedMultivariate normal is maintained
Choice of Samples for Choice of Samples for EstimationEstimation
Choice of Samples for Choice of Samples for EstimationEstimation
1. Consecutive Months Each Year1. Consecutive Months Each Year
Oct. - Feb. Season; 1992-93 to 2002-03Oct. - Feb. Season; 1992-93 to 2002-03
2.2. Aggregate Temporally to Eliminate ZeroAggregate Temporally to Eliminate Zero
Quantities & Missing PricesQuantities & Missing Prices
Semi-annual; 1989 - 2003 Semi-annual; 1989 - 2003
1. Consecutive Months Each Year1. Consecutive Months Each Year
Oct. - Feb. Season; 1992-93 to 2002-03Oct. - Feb. Season; 1992-93 to 2002-03
2.2. Aggregate Temporally to Eliminate ZeroAggregate Temporally to Eliminate Zero
Quantities & Missing PricesQuantities & Missing Prices
Semi-annual; 1989 - 2003 Semi-annual; 1989 - 2003
Uncompensated Elasticities, Sample Median
Uncompensated Elasticities, Sample Median
TangerineTangerine MandarinMandarin OrangeOrange
TangerineTangerine -0.026-0.026 -4.016-4.016 0.4630.463
MandarinMandarin -0.006-0.006 -4.375-4.375 0.0390.039
OrangeOrange 0.3740.374 -0.670-0.670 -2.268-2.268
Sample: Monthly, Oct.-Feb., 1992 – 2003 (T = 55)Sample: Monthly, Oct.-Feb., 1992 – 2003 (T = 55)
TangerineTangerine MandarinMandarin OrangeOrange
TangerineTangerine -0.026-0.026 -4.016-4.016 0.4630.463
MandarinMandarin -0.006-0.006 -4.375-4.375 0.0390.039
OrangeOrange 0.3740.374 -0.670-0.670 -2.268-2.268
Sample: Monthly, Oct.-Feb., 1992 – 2003 (T = 55)Sample: Monthly, Oct.-Feb., 1992 – 2003 (T = 55)
Uncompensated Elasticities, Sample Median
Uncompensated Elasticities, Sample Median
TangerineTangerine MandarinMandarin OrangeOrange
TangerineTangerine -2.193-2.193 0.5430.543 -0.134-0.134
MandarinMandarin 0.0200.020 -0.326-0.326 -0.463-0.463
OrangeOrange 0.1330.133 -0.498-0.498 -0.101-0.101
Sample: Semi-annual, 1989 – 2003 (T = 30)Sample: Semi-annual, 1989 – 2003 (T = 30)
TangerineTangerine MandarinMandarin OrangeOrange
TangerineTangerine -2.193-2.193 0.5430.543 -0.134-0.134
MandarinMandarin 0.0200.020 -0.326-0.326 -0.463-0.463
OrangeOrange 0.1330.133 -0.498-0.498 -0.101-0.101
Sample: Semi-annual, 1989 – 2003 (T = 30)Sample: Semi-annual, 1989 – 2003 (T = 30)
-10
-7.5
-5
-2.5
0OctOct9999
OctOct9999
Own-Price Elasticity, Own-Price Elasticity, MandarinsMandarins
Own-Price Elasticity, Own-Price Elasticity, MandarinsMandarins
OctOct0000
OctOct0000
OctOct0101
OctOct0101
OctOct0202
OctOct0202
Suspension of Suspension of Spanish ImportsSpanish ImportsSuspension of Suspension of
Spanish ImportsSpanish Imports
Cross-Price Elasticity, Mand.-Cross-Price Elasticity, Mand.-OrangeOrange
Cross-Price Elasticity, Mand.-Cross-Price Elasticity, Mand.-OrangeOrange
0
0.05
0.1
0.15
0.2
0.25
OctOct9999
OctOct9999
OctOct0000
OctOct0000
OctOct0101
OctOct0101
OctOct0202
OctOct0202
Suspension of Suspension of Spanish ImportsSpanish ImportsSuspension of Suspension of
Spanish ImportsSpanish Imports
Correction for TruncationCorrection for TruncationCorrection for TruncationCorrection for Truncation
1.1. Necessary for modeling seasonal Necessary for modeling seasonal availability of imports (or exports).availability of imports (or exports).
2.2. Yields reasonable, if highly variable, Yields reasonable, if highly variable, elasticity estimates.elasticity estimates.
3.3. Uses data readily available, e.g. FATUS, Uses data readily available, e.g. FATUS, NOAA.NOAA.
1.1. Necessary for modeling seasonal Necessary for modeling seasonal availability of imports (or exports).availability of imports (or exports).
2.2. Yields reasonable, if highly variable, Yields reasonable, if highly variable, elasticity estimates.elasticity estimates.
3.3. Uses data readily available, e.g. FATUS, Uses data readily available, e.g. FATUS, NOAA.NOAA.
Future WorkFuture WorkFuture WorkFuture Work
Demand for Domestic & Imported Fresh CitrusDemand for Domestic & Imported Fresh Citrus
Apply to other specialty crops, e.g. asparagus, Apply to other specialty crops, e.g. asparagus, fresh tomatoes.fresh tomatoes.
MLE or Non-Parametric EstimationMLE or Non-Parametric Estimation
Demand for Domestic & Imported Fresh CitrusDemand for Domestic & Imported Fresh Citrus
Apply to other specialty crops, e.g. asparagus, Apply to other specialty crops, e.g. asparagus, fresh tomatoes.fresh tomatoes.
MLE or Non-Parametric EstimationMLE or Non-Parametric Estimation
Recommended