Analysis of U.S. Demand for Fresh Tropical Fruits and Vegetables Inports. Authors Author Affiliation and Contact Information

Transcription

1 Analyss of U.S. Demand for Tropcal Fruts and Vegetables Inports Authors Author Afflaton and Contact Informaton Klungu Nzaku, Graduate Assstant Department of Agrcultural and Appled Economcs The Unversty of Georga, Athens, Georga Emal: Jack E. Houston, Professor Department of Agrcultural and Appled Economcs The Unversty of Georga Athens, Georga Emal: Selected Paper prepared for presentaton at the Southern Agrcultural Economcs Assocaton Annual Meetng, Atlanta, Georga, January 31-February 3, 2009 Copyrght 2009 by Nzaku and Houston. All rghts reserved. Readers may make verbatm copes of ths document for non-commercal purposes by any means, provded that ths copyrght notce appears on all such copes.

2 Abstract Ths paper estmates a demand system for a selected tropcal fresh frut and vegetable mports n to the U.S. usng a Lnear Approxmate Almost Ideal Demand Systems model for the perod Further the paper attempts to capture trade polcy and seasonalty effects that affect the demand for fresh frut and vegetable mports. Results show that most of the prce elastctes of demand have the expected sgns and less than unty magntude except for tomatoes. Complmentary commodtes nclude bananas and papayas, grapes, and mangoes, peppers and tomatoes and avocados, and tomatoes and cucumber. Substtutes nclude pneapples and papayas, grapes and papayas, and mangoes and tomatoes. Trade polcy and seasonalty are also found to affect fresh frut and vegetable mports. 1

3 Introducton Snce the 1970s, U.S. demand for fresh fruts and vegetables, especally the demand for tropcal fruts and vegetables has been ncreasng tremendously. The growth n demand could be attrbuted to rsng consumer ncomes and an ncreasng consumer awareness of the health benefts of eatng dets that are heavy n fresh produce over the years (Huang and Huang 2007; Pollack 2001; Wells and Buzby 2008). There s also the effect of a growng U.S. populaton of mmgrants partcularly Asans and Hspancs that s accustomed to a culture of heavy fresh produce meals. In response to the rsng demand for fresh fruts and vegetables, domestc producton rose but not at the same rate as the ncrease n demand manly due to the unfavorable U.S. contnental clmate, seasonalty n producton, and hgh domestc farm labor costs (Huang and Huang 2007; Martn and Thompson 1992; Cook 2001). As a result, the U.S. ncreasngly became more dependent on mports to satsfy demand (Huang and Huang 2007). Between and , annual U.S. mports of fresh fruts and vegetables rose from 2.7 bllon to 7.9 bllon U.S. dollars. The share of total U.S. mports from agrculture for fresh fruts and vegetables ncreased from 11.5 percent to 13.3 percent for the same perod. By the year , mports accounted for 44 percent of fresh frut and vegetable consumpton (Huang and Huang 2007) and at the moment, the a net mporter of fresh fruts. Although the demand for all fresh fruts and vegetables mports went up n general over the last three decades, most of the growth was for tropcal fresh fruts and fresh vegetables. The man tropcal fresh frut mports nclude bananas, mangoes/guavas, papaya, pneapples, avocadoes, and fresh grapes. tomatoes, cucumbers and 2

4 gherkns, peppers, and asparagus on the other hand domnate U.S. fresh vegetable mports. Out of these commodtes, mangoes/guavas, papayas, avocadoes, fresh grapes, tomatoes, cucumbers, and peppers have recorded the hghest growth n mports snce early The growth of value of mports of pneapples, mangoes, guavas, papayas, and avocados was 6 tmes greater n 2006 compared to Import values for grapes grew by over 350 percent n 2006 compared to 100 percent n bananas, whch comprse the bulk of fresh frut mports showed no sgnfcant growth and ts mport value growth was stable at 100 percent for the entre perod (Huang and Huang 2007). Durng the same perod, the mport volume of fresh bell peppers, tomatoes, and cucumbers and gherkns grew by over 400, 300, and 250 percent respectvely (Huang and Huang 2007). The sgnfcance of mports n U.S. consumpton of tropcal fresh fruts n the U.S. consumpton of fresh fruts grew substantally from the year 1989 to Hundred percent of all the mangoes/guavas and banana consumed n the U.S. are mported. The mport shares of fresh papayas and pneapples drastcally ncreased from slghtly less than 50 percent n 1989 to over 80 percent n Avocado mports the accounted for nearly 60 percent of U.S. domestc consumpton n 2006 compared to 10 percent n 1989 (U.S. Department of Agrculture 2007). U.S. fresh frut and vegetable mport supply s domnated by a few regons perhaps due to hgh transport costs, pershable nature of fresh produce commodtes, and santary and phytosantary (SPS) controls (U.S. Department of Agrculture 2008a; U.S. Department of Agrculture 2008b). The North Amercan Free Trade Agreement (NAFTA) tradng block s the sngle largest suppler of fresh vegetables to the U.S. and 3

5 accounts for 84 percent of U.S. vegetable mports (Huang and Huang 2007; U.S. Department of Agrculture 2007). The man sources of U.S. fresh frut mports are the socalled banana-exportng countres, the southern hemsphere countres, and NAFTA partners. The banana exportng countres nclude Colomba, Costa Rca, Ecuador, Guatemala, Honduras and Panama and supply 36 percent of fresh frut mports of whch two-thrds are bananas (Huang and Huang 2007). Second to banana-exportng countres n supplyng U.S. fresh fruts are the Southern Hemsphere countres, whch nclude Argentna, Australa, Brazl, Chle, New Zealand, South Afrca, and Peru. Together the Southern Hemsphere countres supply 32 percent of U.S. fresh frut mports. The thrd major source of U.S. fresh frut mports s NAFTA and t contrbutes approxmately 27 percent of the total fresh frut mports mostly from Mexco (Huang and Huang 2007; U.S. Department of Agrculture 2007; Cook 2001). The entry of more tradng partners such as the Domncan Republc-Central Amerca Free Trade Agreement (CAFTA-DR), and the Chle-US Free Trade Agreement further mproved the avalablty of mports and encouraged more consumpton of exotc fresh fruts and vegetables. Other supply factors that have encouraged mports, are mproved technology n shppng and storage, U.S. farm labor shortages and costs, and unfavorable U.S. contnental clmate (Lucer et al. 2006). As a result the U.S. s ncreasngly dependng on mportaton of tropcal produce from manly tropcal countres to satsfy ts demand s currently a net mporter of fresh produce. The compettveness of U.S. farm produce wthn the country and n the major U.S. frut and vegetable export markets has been extensvely studed (Andayan and Tlley 1997; Feleke 2006; Lee, Seale, and Jerwryapant 1990). However, few studes 4

6 have nvestgated U.S. demand for fresh fruts and vegetables mport. Gven the strong evdence of a rapd growth of fresh fruts and vegetables consumpton and mports, t s mportant to understand the demand nterrelatonshps and the seasonalty effects that affect demand for these commodtes. Ths paper analyzes mport demand relatonshps among selected fresh tropcal fruts and vegetables n the U.S. from 1989 to The fresh tropcal fruts and vegetables consdered n the study nclude bananas, pneapples, avocadoes, papayas, mangoes and guavas for tropcal fresh fruts, and peppers, tomatoes, cucumbers, and asparagus for fresh vegetables. The specfc objectve of the paper s to estmate and provde relable prce elastctes of demand for U.S. fresh tropcal frut and vegetable mports and to dentfy any seasonalty trends that affect the demand for mported fresh tropcal fruts and vegetables. By assessng the demand relatonshps among fresh tropcal fruts and vegetables n the U.S., the paper offer seeks to offer some polcy recommendatons to supplyng countres strateges and the U.S. trade polces for fresh fruts and vegetables. The rest of ths paper s organzed n sectons as follows. In the next secton, a bref prevew of the exstng lterature and methods of analyses are presented. A detaled descrpton of the data utlzed n the study follows secton three under methods. Ths s followed by a presentaton of the results of the analyss and fnally the conclusons. Lterature Revew Common mport demand analyss approaches nvolve the use of consumer demand theory and producton theory. The consumer demand theory approach treats mports as fnal products that drectly enter a consumer s utlty functon (Schmtz and 5

7 Seale 2002) whle producton theory treats mports as nputs (Washngton and Klmer 2002). The consumer demand theory approach enables the dervaton of tradtonal consumer demand and labor supply functons from utlty maxmzaton. On the other hand, nput demand and output supply functons from proft maxmzaton or cost mnmzaton can be obtaned from producton theory approach. Consumer approach applcaton to mport demand analyss s extensve. Emprcal models nclude the Armngton model (Armngton 1969), AIDS model (Deaton and Muellbauer 1980) and Rotterdam model (Thel 1980). Past lterature cautons aganst treatng mports as fnal goods as n the past (Lee, Seale, and Jerwryapant 1990; Seale, Sparks, and Buxton 1992) because the nature of nternatonal trade s such that most goods are ntermedate commodtes whch requre certan processng or repackagng before they are fnally dstrbuted to the consumer (Washngton and Klmer 2002; Muhammad, Jones, and Hahn 2007). In such cases, a producton approach s better placed to estmate mport demand. However, n the case of fresh fruts and vegetables, mports are dstrbuted to consumers n ther fresh form and there s very lttle valueadded process s nvolved. The mports can therefore be justfably classfed as fnal goods and the AIDS model s deemed approprate. Followng Deaton and Muellbauer (1993, 1980), the Almost Ideal Demand System (AIDS) model can be expressed as follows: w = α + γ log p + β log( y/ P) + u (1) j j where w s the expendture share of good, y s total expendture, and u denotes the dsturbance term. P s a prce ndex defned as, 6

8 1 log p = γ * α 0 + α k log pk + j log p k p j (2) k 2 j To be consstent wth consumer demand theory, we must ensure that the demand system satsfes addng-up, homogenety n prces and ncome and Slutsky symmetry condtons hold as follows: α =1, Σ k γ kj = 0, and Σ k β k = 0 (addng-up property) (3) Σ k Σ j γ kj = 0 : (homogenety property), and (4) γ = γ : (symmetry property) (5) kj jk The ntercept α represents the estmated budget share of commodty when all logarthmc prces and real expendtures are zero and can be nterpreted as the subsstence consumpton of commodty. The β s are expendture coeffcents and represent the change n commodty s expendture share wth respect to change n real ncome, ceters parbus. If β > 0, then that commodty s a luxury, and f β < 0, the good s a necessty. Expendture share β > 0 and decrease f β < 0 w, hence ncreases wth an ncrease n total expendture f. The prce coeffcents, γ j, represent the change n the th budget share wth respect to a percentage change n the j th prce wth real expendtures held constant. Ifγ > 0, goods and j are substtutes, whle fγ < 0, they are j complementary goods. To capture seasonalty n the AIDS model, we apply seasonal trgonometrc varables n each share equaton followng Arnade and Pck (1998) as follows: j 4 4 ε (6) w = α + γ log p + β log( y / P) + na Nafta + α f + α g + t trend + j j 1u u 2v v u= 1 v= 1 7

9 where fu and g are seasonal functons defned as, f = cos(( u/ z) Π t), and u u gu = sn(( v/ z) Πt ). Here t represents the observaton number whle z = s /2where s s the frequency of the data. Snce we use quarterly data s = 4 and z = 2. u and v represent the seasonal frequences of data and the seasonal coeffcents α 1u and α 2v measure the contrbuton of each seasonal cycle to the model (Arnade and Pck 1998). Snce most fresh frut and vegetable mports portray one peak season per year (wnter and sprng), we set u and v equal to 1. In addton we add a trend varable trend to capture any trend n fresh tropcal fruts and vegetable mports. We also ntroduce a dummy varable, Nafta to capture the effect of the mplementaton of the NAFTA trade agreement n 1995 between U.S., Canada, and Mexco. from 1989 through 1994 and 1 thereafter. Nafta equals 0 for the tme perod runnng Data and Results The data set ranges from the 1 st quarter of 1989 through the 3 rd quarter of Quarterly mport quanttes and values for the selected fresh fruts and vegetables were calculated by aggregaton of monthly quanttes and values that were obtaned from the USDA s Foregn Agrcultural Statstcs (FAS) webste. Import values are measured are on Cost, Insurance, and Freght (CIF) bass. Usng mport values and quanttes, per-unt values (cents/pound) for all the selected mports were calculated and used as proxes for mport prces. The AIDS demand model (6) s estmated for ten fresh frut and vegetable mports: bananas, pneapples, papaya, mangoes/guavas, grapes, avocados, tomatoes, peppers, cucumbers, and asparagus. Estmaton s done usng TSP Verson 5.0 (Hall and Cummns 2005) by terated seemngly unrelated regresson (ISUR) estmaton. To 8

10 confrm to economc theory, homogenety, symmetry, and addng-up condtons were mposed on the data. The equaton for fresh grapes was dropped from the estmaton process and ts parameters are calculated from the estmated parameters. Results are presented n tables 2 and 3 n the Appendx. Table 2 presents the estmated coeffcents of the LA/AIDS model. Only three ntercepts, α s are statstcally sgnfcance (fresh papaya, fresh mango/guava, and fresh peppers). The real expendture parameters for bananas, avocados, tomatoes, and asparagus are postve ( β > 0) mplyng that they are luxures. Whle our expectatons are that mported fresh fruts and vegetables are luxures, ths fndng for bananas and tomatoes s surprsng because they are more of stable commodtes. Pneapples, papayas, mangoes, peppers, and cucumbers have β < 0 and hence are deemed to be necesstes aganst our expectatons Table 2 about here The results show that NAFTA sgnfcantly mpacted U.S. mports budget shares of fresh bananas, pneapples, papayas, avocados, tomatoes and peppers. NAFTA sgnfcantly ncreased fresh papayas, tomatoes and pepper mport budget shares as expected due to mproved avalablty. The entry of NAFTA resulted n the avalablty of a wde range of fresh fruts whch led to a shft of consumer expendture from bananas whch were prevously the man fresh frut mports to new commodtes such as fresh papaya and mangoes/guavas. Ths explans the negatve sgn of NAFTA dummy for bananas and pneapples. The ntroducton of NAFTA resulted to 5 percent reducton n the budget share for banana mports. Further, the bananas budget share equaton has a negatve sgnfcant trend. Ths mples that budget shares for banana mports have been declnng over the study perod ' 9

11 as consumers reallocate ther budget towards other fresh frut and vegetable mports. Import budget shares for pneapples, avocados, peppers, and cucumber have a postve trend mplyng an ncrease n expendture n lne wth ncreased growth n ther mport values noted n the lterature (Huang and Huang 2007). All the commodtes have at least one seasonalty varable that s statstcally sgnfcant confrmng that that seasonalty n the data play a major role n the demand for tropcal fresh fruts and vegetables. The uncompensated elastctes of demand are calculated at sample means and shown n Table 3. The expendture elastctes for mported fresh asparagus, tomatoes, avocados, and bananas are greater that one mplyng that they are luxury goods. Whle the fndng s justfed for mported fresh asparagus and avocados because they are exotc commodtes, the same s not true for bananas and tomatoes whch are consdered stable foods Table 3 about here The own-prce elastctes of demand for all the ten fresh frut and vegetable mports have a negatve sgn whch conform to economc theory that they are normal goods. The own-prce elastctes range from for papaya to for tomatoes. However, own-prce elastctes of demand are statstcally sgnfcant at 0.1 sgnfcance level for bananas, mangoes/guavas, avocado, tomatoes, peppers, and cucumbers. The own-prce elastcty for bananas s mplyng that a one percent ncrease n the prce of bananas wll result to.54 reducton n budget share for mported bananas. The magntude of the elastcty s comparable to and reported by You, Epperson 10

12 and Huang (1996) and Huang and Ln (1887). Avocados have a prce elastcty of whch s near unty as expected. Own-prce elastcty for tomatoes s shown to be greater than unty whch s twce the reported by Huang and Ln (1996) and by You, Epperson and Huang (1996). Prce elastctes for grapes and asparagus are underestmated n comparson to You, Epperson and Huang (1996) whle those of tomatoes, peppers, cucumbers have been overestmated. Others that appear to be unusually small nclude those for papaya and pneapples despte lack of comparson studes. The estmated cross-prce elastctes show that bananas and papayas, bananas and mangoes/guava, bananas and asparagus are complments snce ther cross-prce elastctes are negatve and sgnfcant. Pneapples and papayas, avocado, and asparagus are substtutes owng to the postve cross-prce elastctes. Grapes only have a relatonshp wth papaya whch s a substtute. Mangoes/guavas are complments wth papaya and avocados probably because of frut salad dets. However, the sgnfcant relatonshps between mangoes/guava and tomatoes and pepper s aganst our expectatons though ths could be due to combnng mangoes, pepper, and tomatoes to make salsa. As expected tomatoes have a complmentary relatonshp wth cucumbers and peppers as they are manly cooked together or consumed n combnaton as vegetable salads. The lack of relatonshp between asparagus and the other vegetables and the substtutablty between most of the frut wth asparagus s strkng gven the fact that there are no ready combnatons of fresh asparagus and fresh fruts. 11

13 Conclusons In ths paper, LA/AIDS model was used to estmate the demand for U.S. tropcal fresh frut and vegetable mports namely bananas, pneapples, papaya, mangoes/guavas, grapes, avocados, tomatoes, cucumbers, peppers, and asparagus. To capture seasonalty and the effect of trade polcy, we ntroduce trgonometrc seasonalty, trend, and a dummy varable for NAFTA. Results show that NAFTA trade block sgnfcantly mpacted papayas, tomatoes and pepper postvely due to mproved accessblty but had a negatve effect on budget shares for bananas and pneapples as t resulted n entry of more varetes of fresh produce. Most fresh fruts and vegetable mport shares are shown to sgnfcantly and postvely respond to real ncome/expendtures mplyng that consumer ncome s a major factor n determnng fresh frut and vegetable mports nto the U.S. Sx out of the ten commodtes show that own commodty prces are very mportant n decdng the mports. Except for bananas, all the fresh fruts and vegetables show a postve trend n mport budget shares. Trgonometrc seasonalty coeffcents show the presence of seasonalty n the budget shares for all the commodtes. However further modelng of the nature of seasonalty s requred to capture the phase and ampltude of the seasonalty. Snce an earler attempt was futle, perhaps the best approach would be to dvde the data nto decades to allevate the problem of the cycle phases overlappng over a long perod due to entry of new tradng partners. Another approach s to us an error correcton model whch s currently beng explored. 12

14 References Andayan, R.M. Sr., and S.D. Tlley Demand and Competton Among Supply Sources: The Indonesan Frut Import Market. Journal of Agrcultural and Appled Economcs 29 (2): Armngton, P A Theory of Demand for Products Dfferentated by Place of Producton. In Internatonal Monetary Fund Staff Papers. Arnade, Carlos, and Danel Pck Seasonalty and unt roots: the demand for fruts Agrcultural Economcs 18 (1): Cook, R.L The U.S. Produce Industry: An Industry n Transton. Chapter 2 n Postharvest Technology of Hortcultural Crops, (eds.), (2001). In Unversty of Calforna Dvson of Agrculture and Natural Resources, Publcaton 3311, edted by A. A. Kader. Deaton, A., and J. Muellbauer An Almost Ideal Demand System. The Amercan Economc Revew. 70 (3): Economcs and Consumer Behavor. London: Cambrdge Unversty Press. Feleke, S.T Global Competton for the Japanese Frut Juce Market. PhD Dssertaton, Unversty of Florda, Ganesvlle, FL Hall, B. H., and C. Cummns TSP 5.0 User s Gude. In TSP Internatonal, Palo Alto, CA. Place Publshed. (accessed September 12, 2008). Huang, K. S., and B. H. Ln Estmaton of food demand and nutrent elastctes from household survey data (TB-1887). US Department of Agrculture Economc Research Servce, Techncal Bulletn. Huang, Sopha., and Kuo. Huang Increased U.S. mports of Frut and Vegetables. In FTS , September, edted by E. R. S. U.S. Department of Agrculture. Lee, J., J. Seale, and P. Jerwryapant Do Trade Agreements Help U.S. Exports? A Study of the Japanese Ctrus Industry. Agrbusness 6: Lucer, Gary., Susan Pollack., Mr Al., and Agnes Perez Frut and Vegetable Backgrounder., edted by E. R. S. U.S. Department of Agrculture. Martn, P.L, and G. Thompson Labor and Internatonal Trade n Vegetables. In Vegetable Markets n the Western Hemsphere, edted by R. A. Lopez and L. C. Polopolus. Ames: Iowa State Unversty Press. 13

15 Muhammad, Andrew, Kethly G. Jones, and Wllam F. Hahn The Impact of Domestc and Import Prces on U.S. Lamb Imports: A Producton System Approach. Agrcultural and Resource Economcs Revew 36 (2): Pollack, S Consumer Demand for Frut and Vegetables: The US Example. Chapter 6. In Changng Structure of Global Food Consumpton and Trade, edted by A. Regm: U.S. Department of Agrculture, Economc Research Servce. Agrcultural and Trade Report, WRS Schmtz, T., and J. Seale Import Demand for Dsaggregated Fruts Japan. Agrcultural and Resource Economcs Revew 34 (3): Seale, J., A. Sparks, and B. Buxton A Rotterdam Applcaton to Internatonal Trade n Apples: A Dfferental Approach. Journal of Agrcultural and Resource Economcs 17 (1): Thel, H System- Wde Exploratons n Internatonal Economcs, Input-Output Analyss and Marketng Research. Amsterdam: North-Holland Publshng Company. U.S. Department of Agrculture, Anmal & Plant Health Inspecton Servce Fruts and Vegetable Permt Informaton 2008a [cted March 20, 2008]. Avalable from U.S. Department of Agrculture, Anmal Plant Health Inspecton Servce Phytosantary Regulaton of the Entry of Fruts and Vegetables nto the Unted States 2008b [cted 08/ ]. Avalable from U.S. Department of Agrculture, Economc Research Servce Frut and Tree Nut Yearbook Spreadsheet Fles (89022). Washngton, A., and R. Klmer The Producton Theory Approach to Import Demand Analyss: A Comparson of the Rotterdam Model and the Dfferental Producton Approach. Journal of Agrcultural and Appled Economcs 34 (3): Wells, Farah Hodan., and Jean. C. Buzby Detary Assessment of Major Trends n U.S. Food Consumpton, , edted by E. R. S. U.S. Department of Agrculture:. You, Z., J. E. Epperson, and C. L. Huang A Composte System Demand Analyss for Fruts and Vegetables n the Unted States. JOURNAL OF FOOD DISTRIBUTION RESEARCH 27:

16 Appendx Table 1: Estmates of LA/AIDS model of wth homogenety and symmetry. Bananas Intercept, α (.5662) Bananas.2038*** (.08) Pneapples (.0162) Papaya *** (.0055) Mango/Guava * (.0157) Grapes (.0613) Avocado (.0137) Tomatoes.0399** (.0217) Pepper.0213 (.0157) Cucumber (.0144) Asparagus *** (.0153) Real Expendture.0429 (.0404) Nafta ** (.0209) cos.0418*** (.0087) sn *** (.0121) Trend *** (.0006) R 2 DW Statstc N Pneapple.1036 (.1038).0301*** (.0059).0034 (.0015).0010 (.0042) (.0136).0061* (.0033) * (.0039) (.0041).0013 (.0037).0095** (.0042) (.0072) *** (.0041) (.0017) *** (.0024).0008*** (.0001) Papaya.0636** (.0318).0085*** (.0016) ** (.0013).0181 (.0055).0000 (.0009) ** (.0011).0010 (.0013) (.0011).0053*** (.0015) (.0020).0052*** (.0011) ** (.0005) *** (.0007).0000 (.0000) Mango/ Guava.2635** (.1315).0150** (.0064).0043 (.0137) * (.0040).0145*** (.0051) ** (.0046).0043 (.0042).0126*** (.0042) * (.0094).0032 (.0051) *** (.0023) *** (.0032).0000 (.0001) Grapes.3222 (.3570).0590 (.0622).0129 (.0102) (.0122).0004 (.0127).0064 (.0116).0115 (.0133) (.0219) Avocado -.00 (.1698).0035 (.0063).0034 (.0065) ** (.0046) (.0042).0013 (.0032).0039 (.0128) *** (.0065) *** (.0027) ** (.0037) *** (.0002) Tomatoes (.4452) (.0188) ** (.0061) *** (.0055).0048 (.0038).0137 (.0342).0705*** (.0164) (.0068).0228** (.0093).0006 (.0004) Pepper.3314** (.1561).0222*** (.0069) (.0045) (.0039) * (.0117).0102* (.0062) (.0025).0146*** (.0036).0011*** (.0002) Cucumber.1127 (.1419).0163*** (.0059).0027 (.0035) (.0105) (.0057).0116*** (.0023).0170*** (.0032).0005*** (.0002) Asparagus (.0993).0273*** (.0057).0017 (.0068).0010 (.0038).0215*** (.0016) *** (.0024) Numbers n parentheses are estmated standard errors. *, **, *** are sgnfcant at the 1 percent, 5 percent and 10 percent levels, respectvely (.0001)

17 Table 2: Uncompensated Elastctes of Demand of U.S. Frut and Vegetable mports. Bananas Pneapples Papaya Mango/ Guava Grapes Avocado Tomatoes Pepper Cucumber Bananas *** (.1902) (.3987) *** (.5527) (.3883) (.4575) (.4928).2062 (.1456).2950* (.1556) (.3094) *** (.4641) Pneapples (.0404) (.1493).3543** (.1549).0421 (.1068) (.1039).2080* (.1181) * (.0250) (.0415).0317 (.0813).2909** (.1303) Papaya *** (.0135).0874** (.0376) (.1623) * (.0337).1384*** (.0421).0000 (.0334) ** (.6920).0116 (.0127) (.0243).1639*** (.0464) Mango/ Guava -.05** (.0387).0359 (.1063) ** (.1387) *** (.1587).0068 (.1076) * (.1401).0841*** (.0314) ** (.0467).0975 (.0919).3873*** (.1280) Grapes (.1529) (.3436) *** (.5738).1673 (.3464) (.4848).4361 (.3656) (.00).0303 (.1286).1527 (.2545).3470 (.4133) Avocado (.0339).1608* (.0829).0084 (.0968) ** (.0991).0997 (.0775) ** (.2227).0181 (.0395) ** (.0460) (.0915).0371 (.0973) Tomatoes.0806 (.0574) (.1038) * (.1194).4387*** (.1354) (.0975).0965 (.2473) *** (.1218) * (.0649) ** (.1286).1383 (.1227) Pepper.0418 (.0416) (.1083).1156 (.1371) ** (.1234).0077 (.1016) ** (.1751) *** (.0436) *** (.0737) (.1059) (.1263) Asparagus Numbers n parentheses are estmated standard errors. ***, **, and * are sgnfcant at the 1 percent, 5 percent and 10 percent levels, respectvely. Cucumber (.0361).0452 (.0939) (.1157).1280 (.1072).0507 (.0890) (.1516) *** (.0350).0004 (.0465) *** (.1295).0815 (.1092) Expendture Asparagus η *** (.0380).2479** (.1057).5554*** (.1553).3297*** (.1043).1014 (.0888).0395 (.1121).0248 (.0248) (.0391).0625 (.0764) -.15 (.1752) *** (.0993).7077*** (.1798).8391*** (.2039).5468)** ( )** (.1670) ** (.4497) *** (.2055).8000*** (.1170).8931*** (.2291) *** (.2103) Table 3: Compensated Elastctes of Demand of U.S. Frut and Vegetable mports. Mango/ Bananas Pneapples Papaya Guava Grapes Avocado Tomatoes *** *** Bananas (.1938) (.0398) (.0134) (.0386) (.1509) (.0338) (.0533) Pepper.1519*** (.0385) Cucumber.0150 (.0353) Asparagus *** (.0377) Pneapples Papaya (.4068) *** (.5639) (.1485).3877** (.1541).0943** (.0375) (.1624).0643 (.1065) * (.1390) (.3405) *** (.5697).1810** (.0830).0323 (.0970) (.0984) (.1136) (.1025).1992 (.1308).0777 (.0928).0116 (.1147).2804*** (.1051).5940*** (.1546) Mango/ Guava (.3924).0639 (.1059) -.05* (.0336) *** (.1590).2391 (.3426) (.0991).5297*** (.1275) (.1161).1531 (.1055).3474*** (.1038) Grapes (.3924).0639 (.1059) -.05*** (.0336) (.1590).2391 (.3426) (.0991).5297 (.1275) (.1161).1531 (.1055).3474 (.1038) Avocado Tomatoes.1654 (.4829).6462*** (.1302).2533** (.1162) (.0235).0110 (.0330) (.0066) (.1395).1274*** (.0307).5856 (.3588).0756 (.0733) *** (.2229).0489 (.0393).2859 (.2297) *** (.1131) * (.1615).0122 (.0364) (.1481) (.0333).0763 (.1109).0610*** (.0227) Pepper.6202*** (.1572) (.0410).0194 (.0127) (.0467).1354 (.1271) * (.0461).0204 (.0609) *** (.0696).0372 (.0456).0101 (.0389) Cucumber.1327 (.3123).0673 (.0803).0024 (.0241).1333 (.0918).2700 (.2516) (.0916) (.1204) ***.3329*.1741***.4294*** *** *** Asparagus (.4729) (.1293) (.0463) (.1283) (.4082) (.0974) (.1164) Numbers n parentheses are estmated standard errors. ***, **, and * are sgnfcant at the 1 percent, 5 percent and 10 percent levels, respectvely. Own elastctes of demand are n bold (.0988).0311 (.1196) *** (.1275).1299 (.10).0915 (.0759) (.1747) 16