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Price Elasticity of Export Demand: Concepts and Estimates

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  • Gardiner, Walter H.
  • Dixit, Praveen M

Abstract

Price elasticity of export demand is an important parameter that determines the effect of price changes on export earnings. This report analyzes the price elasticity of export demand in general and reviews recent estimates for selected U.S. agricultural commodities. While there is little consensus on the size of this parameter, these studies suggest that the shortrun (1 year or less) price elasticity of export demand for U.S. grains, soybeans, and cotton is inelastic. The longrun (more than 1 year) evidence is even less conclusive. Few studies estimate the longrun price elasticity of demand for U.S. agricultural products; and their estimates range from very inelastic to very elastic.

Suggested Citation

  • Gardiner, Walter H. & Dixit, Praveen M, 1987. "Price Elasticity of Export Demand: Concepts and Estimates," Foreign Agricultural Economic Report (FAER) 305286, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersfe:305286
    DOI: 10.22004/ag.econ.305286
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    2. Mahe, L P & Tavera, C, 1988. "Bilateral Harmonization of EC and U.S. Agricultural Policies," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 15(4), pages 327-348.
    3. Unknown, 2006. "Journal of International Agricultural Trade and Development, Volume 2, Number 2, Fall 2006," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 2(2).
    4. Roningen, Vernon O. & Dixit, Praveen M., 1989. "How Level is the Playing Field? An Economic Analysis of Agricultural Policy Reforms in Industrial Market Economies," Foreign Agricultural Economic Report (FAER) 147993, United States Department of Agriculture, Economic Research Service.
    5. Reimer, Jeffrey J. & Zheng, Xiaojuan & Gehlhar, Mark J., 2012. "Export Demand Elasticity Estimation for Major U.S. Crops," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(4), pages 1-15, November.
    6. Haley, Stephen L., 1988. "Targeting Of U.S. Agricultural Export Subsidies: A Theoretical Analysis," Staff Reports 278018, United States Department of Agriculture, Economic Research Service.
    7. Sharples, Jerry A. & Dixit, Praveen M., 1988. "Forces that Could Expand U.S. Wheat Exports: Estimates From a World Wheat Trade Model," Staff Reports 277990, United States Department of Agriculture, Economic Research Service.
    8. Debnath, Deepayan & Thompson, Wyatt & Helmar, Michael & Julian, Binfield, 2014. "Long term consequences of changing global food consumption patterns on U.S. agricultural commodity export demand," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170490, Agricultural and Applied Economics Association.
    9. Bento, Antonio M. & Klotz, Richard & Landry, Joel R., 2011. "Are there Carbon Savings from US Biofuel Policies? Accounting for Leakage in Land and Fuel Markets," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 104008, Agricultural and Applied Economics Association.
    10. Canning, Patrick N. & Vroomen, Harry, 1994. "Welfare Impacts of a Trade Restriction: An Equilibrium Approach and Application in the Potash Industry," Technical Bulletins 156762, United States Department of Agriculture, Economic Research Service.
    11. Baxter, Timothy M. & Smith, Mark E., 1987. "Exchange Rate Risk, Dollar Appreciation, And U.S. Export Credit Programs," Staff Reports 277944, United States Department of Agriculture, Economic Research Service.
    12. McNew, Kevin & Smith, Vincent H., 2003. "Segregation of Grain Markets: Consequences for Price Behavior," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(1), pages 1-19, April.
    13. J. Lee & Gary F. Fairchild, 1988. "Exchange rates and foreign demand for US fresh grapefruit," Agribusiness, John Wiley & Sons, Ltd., vol. 4(3), pages 261-270.
    14. Glauber, Joseph W. & Harwood, Joy L. & Miranda, Mario J., 1989. "Federal Crop Insurance and the 1990 Farm Bill: An Assessment of Program Options," Staff Reports 278249, United States Department of Agriculture, Economic Research Service.
    15. Teigen, Lloyd D., 1988. "Agricultural Policy, Technology Adoption, and Farm Structure," Staff Reports 278118, United States Department of Agriculture, Economic Research Service.

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