IDEAS home Printed from https://ideas.repec.org/a/bla/ajarec/v54y2010i1p27-41.html
   My bibliography  Save this article

Time-varying Armington elasticity and country-of-origin bias: from the dynamic perspective of the Japanese demand for beef imports

Author

Listed:
  • Shigekazu Kawashima
  • Deffi Ayu Puspito Sari

Abstract

Elasticities of substitution, often called Armington elasticities, reflect incomplete substitutability because of perceived product characteristics. This study divides the determinants of the Japanese demand for beef imports into two factors: (i) substitution elasticity and (ii) country-of-origin bias, and demonstrate how these measurements are associated with trade policy and food scare events. The Japanese beef industry serves as a case study to evaluate the multifold impact of import liberalisation and a series of bovine spongiform encephalopathy (BSE) outbreaks. A time-varying parameter model is used to shed light on the dynamic effects of the import liberalisation and BSE outbreaks on the measurements. The estimation results reveal that the estimated substitutability and country-of-origin bias are very sensitive to the BSE cases, but not to the process of trade liberalisation. The results also confirm that as a result of the BSE outbreaks, the major factor of the Japanese demand for beef imports has changed from relative prices to the country-of-origin effect, thereby emphasising the importance of a traceability system and promotional activities, which would help in the formation of the country-of-origin effect. Copyright 2010 The Authors. Journal compilation 2010 Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Asia Pty Ltd.

Suggested Citation

  • Shigekazu Kawashima & Deffi Ayu Puspito Sari, 2010. "Time-varying Armington elasticity and country-of-origin bias: from the dynamic perspective of the Japanese demand for beef imports," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), pages 27-41, January.
  • Handle: RePEc:bla:ajarec:v:54:y:2010:i:1:p:27-41
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/j.1467-8489.2009.00477.x
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Erikson, Glade R. & Wahl, Thomas I. & Jussaume, Raymond A., Jr. & Shi, Hongqi, 1998. "Product Characteristics Affecting Consumers' Fresh Beef Cut Purchasing Decisions In The United States, Japan, And Australia," Journal of Food Distribution Research, Food Distribution Research Society, vol. 29(3), pages 1-10, November.
    2. Weatherspoon, Dave D. & Seale, James L., 1995. "Do the Japanese Discriminate Against Australian Beef Imports?: Evidence From the Differential Approach," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 27(2), pages 536-543, December.
    3. Jill J. McCluskey & Kristine M. Grimsrud & Hiromi Ouchi & Thomas I. Wahl, 2005. "Bovine spongiform encephalopathy in Japan: consumers' food safety perceptions and willingness to pay for tested beef," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(2), pages 197-209, June.
    4. Bruce A. Blonigen & Wesley W. Wilson, 1999. "Explaining Armington: What Determines Substitutability Between Home and Foreign Goods?," Canadian Journal of Economics, Canadian Economics Association, vol. 32(1), pages 1-21, February.
    5. Lopez, Rigoberto A. & Pagoulatos, Emilio & Gonzalez, Maria A., 2006. "Home bias and U.S. imports of processed food products," The North American Journal of Economics and Finance, Elsevier, vol. 17(3), pages 363-373, December.
    6. Reed, Michael R. & Saghaian, Sayed H., 2004. "Measuring the Intensity of Competition in the Japanese Beef Market," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 36(01), pages 1-9, April.
    7. Julian M. Alston & Colin A. Carter & Richard Green & Daniel Pick, 1990. "Whither Armington Trade Models?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(2), pages 455-467.
    8. Jutta Roosen & Jayson L. Lusk & John A. Fox, 2003. "Consumer demand for and attitudes toward alternative beef labeling strategies in France, Germany, and the UK," Agribusiness, John Wiley & Sons, Ltd., vol. 19(1), pages 77-90.
    9. Gallaway, Michael P. & McDaniel, Christine A. & Rivera, Sandra A., 2003. "Short-run and long-run industry-level estimates of U.S. Armington elasticities," The North American Journal of Economics and Finance, Elsevier, vol. 14(1), pages 49-68, March.
    10. Welsch, Heinz, 2006. "Armington elasticities and induced intra-industry specialization: The case of France, 1970-1997," Economic Modelling, Elsevier, vol. 23(3), pages 556-567, May.
    11. Umberger, Wendy J. & Feuz, Dillon M. & Calkins, Chris R. & Sitz, Bethany M., 2003. "Country-Of-Origin Labeling Of Beef Products: U.S. Consumers' Perceptions," Journal of Food Distribution Research, Food Distribution Research Society, vol. 34(3), pages 1-14, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ari Rudatin, 2016. "Analysis on Indonesia’s beef import," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 8(1), pages 65-72, April.
    2. Taha, Fawzi A. & Hahn, William F., 2012. "Modeling South Africa’s Meat Import Demand System," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124582, Agricultural and Applied Economics Association.
    3. Soon, Byung Min & Thompson, Wyatt, 2016. "Estimating Import Demand Functions in Major Beef Importing Countries by Bayesian Hierarchical Linear Model," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235735, Agricultural and Applied Economics Association.
    4. Dandres, Thomas & Gaudreault, Caroline & Tirado-Seco, Pablo & Samson, Réjean, 2012. "Macroanalysis of the economic and environmental impacts of a 2005–2025 European Union bioenergy policy using the GTAP model and life cycle assessment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(2), pages 1180-1192.
    5. Zhou, Li & Li, Lingzhi & Lei, Lei, 2019. "Avian influenza, non-tariff measures and the poultry exports of China," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(01), January.
    6. Cabrini, Silvina & Olemberg, Demián & Cristeche, Estela & Pace, Ignacio & Amaro, Ignacio Benito, 2024. "Agriculture carbon pricing in EU, carbon leakage and carbon adjustment mechanism impacts in southern cone beef exports," IAAE 2024 Conference, August 2-7, 2024, New Delhi, India 344399, International Association of Agricultural Economists (IAAE).
    7. Taha, Fawzi A. & Hahn, William F., 2015. "Factors Driving South African Poultry and Meat Imports," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 18(A), pages 1-18, July.
    8. Byung Min Soon & Wyatt Thompson, 2020. "Japanese beef trade impact from BSE using a time‐varying Armington model," Agribusiness, John Wiley & Sons, Ltd., vol. 36(3), pages 385-401, June.
    9. Schnettler, Berta & Sánchez, Mercedes & Orellana, Ligia & Sepúlveda, José, 2013. "Country of origin and ethnocentrism: a review from the perspective of food consumption," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 17.
    10. Liu, Lan & Yue, Chengyan, 2013. "Investigating the impacts of time delays on trade," Food Policy, Elsevier, vol. 39(C), pages 108-114.
    11. Uuld, Amar & Magda, Robert, 2021. "Estimation Of Armington Elasticities: Case Of Vegetables In Mongolia," APSTRACT: Applied Studies in Agribusiness and Commerce, AGRIMBA, vol. 15(01-2), June.
    12. Bajzik, Josef & Havranek, Tomas & Irsova, Zuzana & Schwarz, Jiri, 2020. "Estimating the Armington elasticity: The importance of study design and publication bias," Journal of International Economics, Elsevier, vol. 127(C).
    13. Josef Bajzik & Tomas Havranek & Zuzana Irsova & Jiri Schwarz, 2019. "Estimating the Armington Elasticity: The Importance of Data Choice and Publication Bias," Working Papers IES 2019/19, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Jul 2019.
    14. Lei, Lei & Zhou, Li, 2017. "Avian influenza, nontariff measures, and the poultry exports in the global value chain," IDE Discussion Papers 640, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    15. Edgardo Ayala & Joana Chapa, 2017. "AH1N1 impact on the Mexican pork meat market," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 32(1), pages 3-25.
    16. Schnettler, Berta & Sánchez, Mercedes & Orellana, Ligia & Sepúlveda, José, 2013. "Country of origin and ethnocentrism: a review from the perspective of food consumption," Economi­a Agraria (Revista Economia Agraria), Agrarian Economist Association (AEA), Chile, vol. 17, pages 1-17, December.
    17. Takahashi, Kohya & Maeda, Koshi, 2018. "Impacts of the TPP Agreement on Beef Demand in Japan: An Analysis by Class," Japanese Journal of Agricultural Economics (formerly Japanese Journal of Rural Economics), Agricultural Economics Society of Japan (AESJ), vol. 20.
    18. Hayiel Hino & Israel D. Nebenzahl, 2021. "Applying information integration theory to the study of boycott–spillover to linked regions," Quality & Quantity: International Journal of Methodology, Springer, vol. 55(5), pages 1889-1915, October.
    19. Ning, Xin & Grant, Jason H. & Peterson, Everett B., 2021. "Estimating Structural Change in the Japanese Beef Import Market in the Wake of BSE: A Smooth Transition Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 47(01), January.
    20. Soon, Byung Min & Thompson, Wyatt, 2017. "Testing for Persistent Japanese Beef Trade Impacts from BSE Using a Time-Varying Armington Model," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 259150, Agricultural and Applied Economics Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kawashima, Shigekazu & Sari, Deffi Ayu Puspito, 2010. "Time-varying Armington elasticity and country-of-origin bias: from the dynamic perspective of the Japanese demand for beef imports," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(01), pages 1-15.
    2. Welsch, Heinz, 2008. "Armington elasticities for energy policy modeling: Evidence from four European countries," Energy Economics, Elsevier, vol. 30(5), pages 2252-2264, September.
    3. Wunderlich, A.C. & Kohler, A., 2018. "Using empirical Armington and demand elasticities in computable equilibrium models: An illustration with the CAPRI model," Economic Modelling, Elsevier, vol. 75(C), pages 70-80.
    4. Miguel, Carlos de & O'Ryan, Raúl & Pereira, Mauricio & Carriquiri, Bruno, 2009. "Energy shocks, fiscal policy and CO2 emissions in Chile," Conference papers 331817, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Olekseyuk, Zoryana & Schürenberg-Frosch, Hannah, 2016. "Are Armington elasticities different across countries and sectors? A European study," Economic Modelling, Elsevier, vol. 55(C), pages 328-342.
    6. Purba Mukerji & John Struthers, 2021. "Armington Elasticity and Development," Journal of Industry, Competition and Trade, Springer, vol. 21(1), pages 59-79, March.
    7. Bajzik, Josef & Havranek, Tomas & Irsova, Zuzana & Schwarz, Jiri, 2020. "Estimating the Armington elasticity: The importance of study design and publication bias," Journal of International Economics, Elsevier, vol. 127(C).
    8. Welsch, Heinz, 2006. "Armington elasticities and induced intra-industry specialization: The case of France, 1970-1997," Economic Modelling, Elsevier, vol. 23(3), pages 556-567, May.
    9. Andrew Muhammad & Richard L. Kilmer, 2008. "The impact of EU export subsidy reductions on U.S. dairy exports," Agribusiness, John Wiley & Sons, Ltd., vol. 24(4), pages 557-574.
    10. Cassoni, Adriana & Flores, Manuel, 2008. "Methodological shortcomings in estimating Armington elasticities," Conference papers 331813, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. Yilmazkuday, Hakan, 2019. "Estimating the trade elasticity over time," Economics Letters, Elsevier, vol. 183(C), pages 1-1.
    12. Sauquet, Alexandre & Lecocq, Franck & Delacote, Philippe & Caurla, Sylvain & Barkaoui, Ahmed & Garcia, Serge, 2011. "Estimating Armington elasticities for sawnwood and application to the French Forest Sector Model," Resource and Energy Economics, Elsevier, vol. 33(4), pages 771-781.
    13. Marilyne Huchet‐Bourdon & Esmaeil Pishbahar, 2009. "Armington Elasticities and Tariff Regime: An Application to European Union Rice Imports," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(3), pages 586-603, September.
    14. Yilmazkuday, Hakan, 2012. "Understanding interstate trade patterns," Journal of International Economics, Elsevier, vol. 86(1), pages 158-166.
    15. Kassas, Bachir & Cao, Xiang & Gao, Zhifeng & House, Lisa A. & Guan, Zhengfei, 2023. "Consumer preferences for country of origin labeling: Bridging the gap between research estimates and real-world behavior," Journal of choice modelling, Elsevier, vol. 48(C).
    16. repec:bla:reviec:v:17:y:2009:i:si:p:292-303 is not listed on IDEAS
    17. Crucini, Mario J. & Davis, J. Scott, 2016. "Distribution capital and the short- and long-run import demand elasticity," Journal of International Economics, Elsevier, vol. 100(C), pages 203-219.
    18. Bajzik, Jozef & Havranek, Tomas & Irsova, Zuzana & Schwarz, Jiri, 2019. "The Elasticity of Substitution between Domestic and Foreign Goods: A Quantitative Survey," EconStor Preprints 200207, ZBW - Leibniz Information Centre for Economics.
    19. Brian Mennecke & Anthony Townsend & Dermot J. Hayes & Steven M. Lonergan, 2006. "Study of the Factors that Influence Consumer Attitudes Toward Beef Products Using the Conjoint Market Analysis Tool, A," Center for Agricultural and Rural Development (CARD) Publications 06-wp425, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    20. Marcelo Olarreaga & Hiau Looi Kee & Alessandro Nicita, 2004. "Estimating Import Demand and Export Supply Elasticities," Econometric Society 2004 North American Summer Meetings 368, Econometric Society.
    21. Hiau Looi Kee & Alessandro Nicita & Marcelo Olarreaga, 2008. "Import Demand Elasticities and Trade Distortions," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 666-682, November.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ajarec:v:54:y:2010:i:1:p:27-41. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/aaresea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.