Changes in Import Demand Elasticity for Red Meat and Livestock: Measuring the Impacts of Animal Disease and Trade Policy

This paper estimates import demand functions for red meat and live cattle and investigates the impact of BSE and the trade ban on Canadian Cattle and beef on U.S. import demand elasticity using an error correction model (ECM). The results show that beef, pork, and live cattle were price inelastic prior to the BSE case. There has been statistical evidence of the effect of BSE and the trade bans on import demand elasticity in favor of more elastic demand. The effect is, however, quite small in absolute values for pork and beef imports and is relatively more elastic for live cattle. But the import demand elasticities of the three products are still inelastic. The use of ECM model provides efficient and robust estimates of the parameters.