Title: Using the elasticities from the AIDS model to evaluate international market competitiveness: the case of three Egyptian wheat markets
Authors: John M. Kagochi, Curtis M. Jolly
Addresses: School of Business Administration, University of Houston-Victoria, 3007 N. Ben Wilson, Victoria, Texas 77901, USA. ' Department of Agricultural Economics and Rural Sociology, Auburn University, 202 Comer Hall, Alabama Agricultural Experiment Station, AL 36849, USA
Abstract: The Almost Ideal Demand System (AIDS) model approach is used to assess the competitive position of US wheat relative to Australian wheat in the Egyptian market. Results from expenditure elasticities suggest that US import share will rise with Egyptian household income. Cross price elasticities obtained suggest that US wheat is a stronger substitute for Australian wheat, but the reverse is asymmetrical. The study finds that for USA to maintain and expand its competitive position in the Egyptian market in the long-run, it is necessary to maintain current low prices, while improving wheat quality in the long-run.
Keywords: expenditure elasticities; cross pricing; international market competitiveness; wheat trade; AIDS model; Almost Ideal Demand System; Egypt; agriculture; USA; United States; Australia; imports; household income; price maintenance; wheat quality; global markets.
International Journal of Trade and Global Markets, 2010 Vol.3 No.2, pp.154 - 169
Published online: 27 Jan 2010 *Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article