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