Elasticities of Chilean Import Demand for Dairy Products Differentiated by Exporters. Emphasis in Mercosur countries, the European Union and the United States

RODRIGO GARCÍA ARANCIBIA

Talca

Congreso; IAAE Inter-Conference Symposium - 5to Congreso Regional de Economía Agraria; 2017

IAAE - Universidad de Talca

The study of the Chilean market for milk imports is relevant due to its impact on the determination of prices in the domestic dairy chain and for being a relevant market for some exporting countries, such as Argentina. In recent years, together with an increase in Chilean dairy imports, there has been a change in its composition, with the incorporation of the United States and New Zealand as relevant exporters. This paper estimates a Chilean import demand system for dairy products taking into account the main source countries for the period 2002-2014. Specifically, a linear approximation of Source Differentiated Almost Ideal Demand System (SAIDS) is estimated for milk powder and cheese imported by Chile, considering the competition between the different exporters that participate in the Chilean market. Expenditure, own-price and cross-price elasticities are estimated, and an elasticity-based index is proposed to compare the competitive position of the exporting countries.