The export elasticity of demand revisited: Implications of changing markets

International cotton markets have experienced many changes in the last two decades. However, the latest available estimates of the elasticity of export demand for U.S. cotton are from Duffy et al., dating back to 1982. This study represents an update of the existing estimates of export demand elasticity for U.S. cotton and the analysis of changes of these estimates over time. The results indicate that total elasticity of export demand for U.S. cotton increased from (-2.13) in the early 1970s to (-2.41) in the mid 1990s. This finding suggests that the global cotton market for U.S. cotton has become more competitive in the last two decades. For U.S. agricultural policy, the results suggest a need to consider extending funding for the export enhancement program if import quotas are maintained.