Japanese Meat Import Demand Estimation with the Source Differentiated AIDS Model

Abstract

A source differentiated AIDS model is specified to estimate Japanese meat import demand. Block separability and product aggregation are rejected at conventional levels of significance. The model with the block substitutability restriction explains more than 95% of data variation. The empirical results indicate that the U.S. has the largest potential for beef exports to Japan. Taiwan is in a strong position in the pork market, and Thailand and China are strong in the poultry market. The U.S. competes with Canada and Taiwan in the pork market, but the competition between Taiwan and European countries is the strongest in the market. The U.S. competes with Thailand in the poultry market, where the U.S. is the most vulnerable.

Keywords

• almost ideal demand system
• block substitutability
• expenditure endogeneity
• product aggregation
• separability
• source differentiation