Variability in wheat export demand elasticity: policy implications

S. Devadoss, William H. Meyers

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

Abstract

Agricultural economists and policy makers in the United States believe that the magnitude of the export demand elasticity is one of the most important parameters used in farm policy decisions. However, past empirical estimates show wide variation in the size of the U.S. export demand elasticity. Reasons for this wide variation go beyond differences in model specification, estimation methods, and period of estimation to involve factors such as trade policies and changes in the supply and demand conditions of foreign countries. In view of the continual variation in magnitude, the elasticity of export demand should be viewed as a variable rather than as a parameter. In this study, U.S. wheat export demand elasticities are computed using a world wheat trade model. The estimates show that the elasticities vary significantly over time. They also reveal that elimination of trade barriers would more than double wheat export demand elasticities.

Original languageEnglish
Pages (from-to)381-394
Number of pages14
JournalAgricultural Economics
Volume4
Issue number3-4
DOIs
StatePublished - Dec 1990

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