New Aggregate and Source-Specific Pork Import Demand Elasticity for Japan: Implications to U.S. Exports
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The Center for Agricultural and Rural Development (CARD) conducts innovative public policy and economic research on agricultural, environmental, and food issues. CARD uniquely combines academic excellence with engagement and anticipatory thinking to inform and benefit society.
CARD researchers develop and apply economic theory, quantitative methods, and interdisciplinary approaches to create relevant knowledge. Communication efforts target state and federal policymakers; the research community; agricultural, food, and environmental groups; individual decision-makers; and international audiences.
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Abstract
The authors estimate aggregate and source-specific import demand elasticities for pork in Japan using a two-stage model that has two important advantages over other models: it allows substitution between domestic and imported products, and it avoids econometric problems in generating source-specific parameters. Pork imports into Japan are constrained by high protection and the strong preference Japanese consumers have for domestic pork. U.S. pork is inexpensive in Japan, but because food safety and quality drive pork demand in Japan, U.S. pork's comparatively low price may not be providing a market advantage. However, U.S. pork exports to Japan have performed well over the past three years, suggesting that the U.S. may have benefited from disease challenges in Taiwan and the E.U. or that the U.S. is learning to meet Japanese consumer demands more effectively.