Source Differentiated Mexican Dairy Import Demand

Mexico is a major destination of dairy exports and is the single largest importer of US dairy exports. We use a restricted source almost ideal demand system to estimate the demand for dairy products imported into Mexico. The estimation facilitates an examination of the demand for dairy imports and the results have implications for exporting firms and countries. Our estimates indicate fierce competition for the Mexican market between the US, Oceania, and “other countries†primarily from South America.