U.S. Mushroom Import Demand Estimation with the Source-Differentiated AIDS Model

Abstract

Recognising that the share of imports in total consumption has been increasing, and will likely continue to do so as US consumers adopt healthier diets, the goal of this paper is to contribute to the understanding of US mushroom demand by estimating the first-ever import demand elasticities for canned and fresh mushrooms by source. Price elasticities from a source-differentiated almost ideal demand system (AIDS) model suggest that while Canada, the leading exporter of fresh mushrooms to the US, may gain more revenue from rising mushroom prices; China, the leading exporter of canned mushrooms to the US may lose. The expenditure elasticities suggest that Chinese exporters of canned mushrooms stand to gain more from rising US spending on imported mushrooms than Canadian exporters of fresh mushrooms. Should NAFTA be scrapped and tariffs imposed, Mexico will lose more market share in the US fresh mushroom market than Canada.