Int. J. of Trade and Global Markets   »   2015 Vol.8, No.4

 

 

Title: A dynamic analysis of US banana demand by source: a focus on Latin American suppliers

 

Authors: Andrew Muhammad; Steven Zahniser; Esendugue Greg Fonsah

 

Addresses:
U.S. Department of Agriculture, Economic Research Service, Markets and Trade Economics Division, Washington, DC, USA
U.S. Department of Agriculture, Economic Research Service, Markets and Trade Economics Division, Washington, DC, USA
Department of Agricultural and Applied Economics, University of Georgia - Tifton Campus, Tifton, Georgia, USA

 

Abstract: We estimated US banana demand disaggregated by exporting country using the generalised dynamic Rotterdam model. Results indicated that dynamic factors, prices, and total expenditures played an important role in determining how the USA allocated banana imports across supplying countries. We were particularly interested in Guatemala's emergence as the leading US supplier and Costa Rica's decline. Overall, there was no significant difference in the demand estimates between the two countries. The dynamic adjustment estimates indicated that both countries were positively affected by their past exports, and the long-run expenditure elasticities indicated that both were particularly sensitive to changes in total US expenditures. However, demand estimates indicated that there is significant price competition between the two countries and the uncompensated price elasticities indicated that the demand for Costa Rican bananas was relatively more elastic in the long run.

 

Keywords: bananas; generalised dynamic Rotterdam model; imports; exports; USA; United States; banana demand; Latin American suppliers; dynamic factors; prices; total expenditure; Guatemala; Costa Rica; price competition; price elasticities.

 

DOI: 10.1504/IJTGM.2015.072791

 

Int. J. of Trade and Global Markets, 2015 Vol.8, No.4, pp.281 - 296

 

Submission date: 31 May 2014
Date of acceptance: 31 Jan 2015
Available online: 03 Nov 2015

 

 

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