Andrew Muhammad

International Evidence on Food Consumption Patterns: An Update Using 2005 International Comparison Program Data

In a 2003 report, International Evidence on Food Consumption Patterns, ERS economists estimated income and price elasticities of demand for broad consumption categories and food categories across 114 countries using 1996 International Comparison Program (ICP) data. This report updates that analysis with an estimated two-stage demand system across 144 countries using 2005 ICP data. Advances in ICP data collection since 1996 led to better results and more accurate income and price elasticity estimates. Low-income countries spend a greater portion of their budget on necessities, such as food, while richer countries spend a greater proportion of their income on luxuries, such as recreation. Low-value staples, such as cereals, account for a larger share of the food budget in poorer countries, while high-value food items are a larger share of the food budget in richer countries. Overall, low-income countries are more responsive to changes in income and food prices and, therefore, make larger adjustments to their food consumption pattern when incomes and prices change. However, adjustments to price and income changes are not uniform across all food categories. Staple food consumption changes the least, while consumption of higher-value food items changes the most.

Disentangling Corn Price Volatility: The Role of Global Demand, Speculation, and Energy

Despite extensive literature on contributing factors to the high commodity prices and volatility in the recent years, few have examined these causal factors together in one analysis. We quantify empirically the relative importance of three factors: global demand, speculation, and energy prices/policy in explaining corn price volatility. A structural vector auto-regression model is developed and variance decomposition is applied to measure the contribution of each factor in explaining corn price variation. We find that speculation is important, but only in the short run. However, in the long run, energy is the most important followed by global demand.

The Impact of Domestic and Import Prices on U.S. Lamb Imports: A Production System Approach

As U.S. lamb imports increased relative to domestic production, and the relative share of chilled to frozen lamb imports increased, importers of chilled lamb have become less responsive to domestic and import prices, while the direct opposite is the case for frozen lamb imports. From 1990 to 2003, chilled lamb imports from Australia and New Zealand became less and less responsive to U.S. prices, and frozen imports became more responsive. Unconditional own-price elasticities also show that, over time, imports of chilled lamb became less responsive to import prices while frozen imports became more responsive to import prices.

Source-Based Preferences and U.S. Salmon Imports

Abstract This study examined U.S. demand for salmon imports differentiated by source (Canada, Chile, and the rest of the world [ROW]), product cut (fillets and other salmon products), and form (fresh and frozen). The Rotterdam model was used in estimation, and source-aggregation tests were performed to determine the significance of source differentiation in analysis. We also performed separability tests to determine if import preferences were source-wise dependent or source independent. Test results strongly reject source aggregation; however, source-wise dependence could not be rejected. Furthermore, source-aggregated demand was significantly more price-elastic when compared to source-wise dependent demand. Results show that import preferences are not homogeneous across exporting countries, and there is significant information loss when source differentiation is not considered. JEL Classification Code: F14, Q11, Q17, Q22

The Impact of Catfish Imports on the U.S. Wholesale and Farm Sectors

The primary objective of this study was to assess the impact of catfish imports and tariffs on the U.S. catfish industry, with particular focus on the U.S. International Trade Commission ruling on Vietnam in 2003. Given the importance of Vietnam to the U.S. catfish market, it was assumed that catfish import prices would increase by 35 percent if the maximum tariff was imposed on catfish from Vietnam. With the tariff, domestic catfish prices at the wholesale level would increase by

The evolution of foreign wine demand in China

0.06 per lb, and farm prices by

Do U.S. Cotton Subsidies Affect Competing Exporters? An Analysis of Import Demand in China

0.03 per lb. Processor sales would increase by 1.66 percent. Total welfare at the wholesale level would increase from

U.S. Demand for Source–Differentiated Shrimp: A Differential Approach

69.2 million to

China's soybean product imports: an analysis of price effects using a production system approach

71.7 million, an increase of about 3.63 percent, and processor and farm revenue would increase by 4.4 percent and 5.8 percent, respectively. These results represent the greatest possible benefit and suggest modest gains for the U.S. catfish industry.

An Assessment of Dynamic Behavior in the U.S. Catfish Market: An Application of the Generalized Dynamic Rotterdam Model

We estimate source-differentiated wine demand in China using the absolute price version of the Rotterdam demand system. Within the last decade, China has gone from obscurity to an important participant in global wine trade. The continual growth of Chinese wine imports suggests that a one-time structural shift approach may not fully capture how consumption patterns or demand preferences have changed over time. Thus, a rolling or moving regression procedure is used to account for continual adjustments in import demand patterns and to evaluate overall parameter instability. Our results confirm that Chinese consumers hold French wine in high regard and that French wine demand has consistently increased over the last decade, more than any other exporting source. Consumers in China have gone from allocating about 1/3 to over 1/2 of every dollar to French wine and the expenditure elasticity for French wine mostly increased while the market was expanding. Although Australian wine has a very solid standing in the Chinese market, results suggest that its market share will likely remain unchanged. Marginal budget share and expenditure elasticity estimates indicate that Australia will continue to account for about 20 per cent of the foreign wine market in China.