Journal of Agricultural and Resource Economics
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We assess the effect of bovine spongiform encephalopathy (BSE) on Japanese beef imports from the United States and competing suppliers. Using a source-differentiated almost ideal demand system of beef imports with endogenous smooth transition functions, we find that a nonlinear structural change has occurred in the Japanese beef import market in the wake of BSE. The BSE outbreaks led an instantaneous, persistent impact on Japanese beef imports lasting over a decade, causing a significant shift in Japanese consumer preferences for beef imports from different origins. Over half of the estimated expenditure, own-price, and cross-price elasticities have changed in the aftermath of BSE, and some have not returned to their pre-BSE levels even after the trade recovery period.
A competitive partial-equilibrium spatial model with heterogeneous goods is constructed to evaluate effects of the removal of tariffs, tariff-rate quotas, and sanitary regulations on world poultry trade. The model distinguishes between “highvalue” (mostly white meat) and “low-value” (mostly dark meat) poultry products and simulates the trade flows among eight exporting and importing countries and regions. Removing all barriers simultaneously has a larger impact on trade than removing only tariffs and tariff-rate quotas. Imposition of sanitary barriers against U.S. products by Russia shifts trade flows, but does not have large net impacts on U.S. producers.
This study estimates a set of unconditional own-price and expenditure elasticities across time for 49 processed food categories using scanner data and the FAST multi-stage demand system with fixed effects across time. Estimated own-price elasticities are generally much larger, in absolute terms, than previous estimates, while our expenditure elasticities are generally much lower. The use of disaggregated product groupings, scanner data, and the estimation of unconditional elasticities likely accounts for these differences. Results of the study suggest providing more disaggregate product-level demand elasticities could aid in the economic analysis of issues relating to industry competitiveness or the impact of public policy.
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