Estimation of import demand models for the pharmaceutical products in Australia

This study estimates the Australian import demand models for pharmaceutical products from the Rest of the World (RoW) and 4 selected countries. The selected countries in this study are France, Germany, United Kingdom and The United States of America. A total of 5 import demand models are estimated side-by-side, based on both monetary and Quantity (QTY) values, giving in total 10 import demand models estimated. The import demand model estimated consists of 5 explanatory variables: Real Price (RP), Real Gross Domestic Product (RGDP) and three Dummy Variables, dummy variables for the June (DQ2), September (DQ3) and December Quarters (DQ4). This study finds that all 10 import demand models are significant. Further findings are that the explanatory variable RP is mostly significant and inelastic; the RGDP is mostly significant and elastic and that import demand in June, September and December quarters are in average lower than in the March quarter. In overall, these findings suggests that changes in the relative prices of pharmaceutical products affect relatively smaller changes in the demand of pharmaceutical products, that the changes in real income in Australia affect larger changes in the demand of pharmaceutical products and that the import demand of pharmaceutical products in June, September and December quarters is lower compared to the March quarter in averag