Demand elasticities for Chilean apples in the European Union market: an econometric estimation

The European Union (EU) is one of the principal markets for Chilean apples (Malus domestica L.). In this study an econometric model of demand for imports of Chilean apples in the EU was examined. The Ordinary Least Squares (MCO) technique was used with annual data from 1984 to 2002 to estimate demand elasticities. The variables that explained the demand changes were determined to be per capita income (PIB) in the EU, the relative price difference between Chilean and Chinese apples, the weighted average exchange rate variation in the EU, and a dichotomous special change variable. The value found for income elasticity of demand for imports was 0.913, relative price elasticity -0.368, and exchange rate elasticity -0.519. The main conclusion of this research suggests that demand for Chilean apple imports in the EU is inelastic relative to changes in income, relative price and exchange rate