Canadian Orange Juice Imports and Production Level Import Demand
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Import demand equations are estimated in order to identify the own-, cross-price,
and volume elasticities that can be used to determine the best marketing strategy
to increase U.S. orange juice gallons in the Canadian import market. This study
uses the firm’s version of production differential, AIDS, CBS, and NBR models.
An expansion of total Canadian orange juice import gallons using advertising
favors the U.S. much more than it does the other three origins investigated—
Brazil, Mexico, and ROW. A 1% increase in imported gallons of orange juice
due to advertising will increase U.S. imports by 1.20% and Brazil’s gallons
by 0.60%.