Title: Source-differentiated analysis of exchange rate effects on US beef imports

Authors: Keithly G. Jones; Andrew Muhammad; Kenneth Mathews Jr.

Addresses: Animal Products and Cost of Production Branch, Market and Trade Economics Division, Economic Research Service United States Department of Agriculture, Washington DC, USA ' International Demand and Trade, Market and Trade Economics Division, Economic Research Service United States Department of Agriculture, Washington DC, USA ' Animal Products and Cost of Production Branch, Market and Trade Economics Division, Economic Research Service United States Department of Agriculture, Washington DC, USA

Abstract: The non-linear Inverse Almost Ideal Demand System is used in estimating the impact of exchange rates on source-differentiated import demand for beef in the USA. We estimate scale, own and cross-price flexibilities for six major beef suppliers and the rest of the world, incorporating exchange rates exogenously. Results indicate that beef imports from Canada and ROW were own-price flexible but the remaining countries - Argentina, Brazil, Uruguay, Australia and New Zealand - were own-price inflexible. Though exchange rate pass-through differs among sources, nearly all of the exporting countries had a near complete exchange rate pass-through. All own exchange-rate effects are negative and significant, except beef imported from Uruguay while nearly all cross exchange-rate effects are insignificant.

Keywords: beef imports; import demand; exchange rate fluctuation; inverse AIDS; almost ideal demand system; USA; United States; price flexibility.

DOI: 10.1504/IJTGM.2013.056745

International Journal of Trade and Global Markets, 2013 Vol.6 No.4, pp.406 - 420

Received: 06 Oct 2011
Accepted: 19 Oct 2012

Published online: 30 Sep 2014 *

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