DOI QR코드

DOI QR Code

An Effect of Orange Import on Domestic Fruits and Vegetables Price in Korea

오렌지 수입이 국내산 과일 및 과채 가격에 미친 영향

  • Received : 2015.10.26
  • Accepted : 2015.11.13
  • Published : 2015.12.31

Abstract

A Linear Approximated Inverse Almost Ideal Demand System, suggested by Eales and Unnevehr, is estimated with monthly data set of Korean fruits consumption. LA/IAIDS consists of 6 demand equations which correspond to domestically produced Hanrabong, overwintering mandarin, strawberry, melon and tomato with imported orange. The results indicate that price and scale flexibilities are negative, as expected. And the significance is that a 10% increase in imported orange quantity is associated with 5.5% declines in the price of Korean Hanrabong while the price of other fruits is minimally affected. In addition, the estimate of scale flexibility of Hanrabong (-2.96) is much smaller than any other fruit. Hanrabong farmer might be in the face of deficit operation as a consequence of the substitution effect if orange would be imported in accordance with the Korea-U.S. free trade agreement.

Keywords

References

  1. Barten, A. P. 1977. The Systems of Consumer Demand Functions Approach: A Review. Econometrica. 45:23-51. https://doi.org/10.2307/1913286
  2. Chen, P. Y. and M. M. Veeman. 1991. An Almost Ideal Demand System Analysis for Meats with Habit Formation and Structural Change. Canadian Journal of Agricultural Economics. 39: 223-235. https://doi.org/10.1111/j.1744-7976.1991.tb03569.x
  3. Deaton, A. and J. Muellbauer. 1980. Economics and Consumer Behavior. New York. Cambridge University Press.
  4. Eales, J. S. and L. J. Unnevehr. 1988. Simultaneity and Structural Change in U.S. Meat Demand. American Journal of Agricultural Economics. 75: 259-268.
  5. Kim, H. Y. and T. K. Kim. 2003. Test of Endogeneity of Prices, Quantities and Structural Change in Korean Meat Demand. Journal of Rural Development. 26: 39-51.
  6. Lee, K. I. and J. H. Choi. 1999. Seasonal Fruit Demand Analysis by Using the AIDS Model. Journal of rural Development. 22: 19-34.
  7. Lee, Y. S., Y, S. Shin, J. W. Park, and S. R. Kim. 2014. Analysis of Changes in Fruits Consumption Patterns and their Reasons : Focused on the Effects of Imported Fruits. Korea rural economic institute. R714.
  8. Moon, H. P., H. K. Lee, and H. W. Park. 2013. An Impact Analysis of Oranges Tariff Reduction under the Korea-U.S. FTA on Major Domestically Produced Fruits. Korean Journal of Agricultural Economics. 54: 15-38.
  9. Noh, S. J., S. H. Lee, and J. H. Cho. 2012. Estimates of Price and Expenditure Elasticities of Demand for Imported Orange and Domestically Produced Fruits in Korea, KREI. Journal of rural Development. 35: 81-96.