Estimating The Import Demand Function of Citrus In Saudi Arabia Using Differentiated AIDS Model

This paper has used the (AIDs) model to study and analyze the import demand for citrus (Orange, Mandarin, Lemon) of the kingdom of Saudi Arabia. Further, the level of competition and the sepraability among the main sources of importation (Egypt, Jordan, Lebanon and other countries) has been investigated. The method of estimating the demand function includes both iterative and regular seemingly unrelated regression. This paper has also considerd imposing the necessary demand conditions such as (additivity, homogeneity and symmetry). By applying such conditions to the demand functions, the study provided the relevant demand elasticities for the sources of importation. The main results of the study show that the demand of imported Orange is price elastic. However Lemon is found to be affected by other factors rather than its own price. Such factors are income and prices of other commodities. Further, the study shows Mandarin to have price inelastic demand, with no apparent substitutability with Orange. As far as the sources of goods, this study shows a considerable competition among Eygept, Jordn and Lebanon. Finally, in the Orange import market, consumer preferences indicated more bias towards Egypt and Lebanon than to Jordan