Substitution between domestic and imported orange juice and impacts of U.S. tariffs on prices and production

A demand system model differentiating goods by product form and origin is developed to examine the impact of eliminating U.S. tariffs on orange-juice prices. An empirical analysis suggests a range of tariff impacts on prices depending on the degree of substitution between products. The model yielded similar results as alternative models when substitution was assumed to be relatively strong. In the long run, lower, without-tariff prices can be expected to lead to lower Florida orange planting and production levels. A sustained reduction in the U.S. OJ price of half the value of the FCOJ tariff is estimated to reduce orange planting levels by about 50% and orange production would declined by 24% by 2021-22.price, tariffs, orange juice, product differentiation, Agribusiness, Demand and Price Analysis, International Relations/Trade,