Year of Publication

2005

Degree Name

Master of Science (MS)

Document Type

Thesis

College

Agriculture

Department

Agricultural Economics

First Advisor

Dr. Mary A. Marchant

Abstract

The objectives of this research are to examine the demand for processed foods by emerging markets and to assess demand determinants and potential import growth. Processed foods are the fastest growing segment of U.S. agricultural exports and hence it is imperative to understand the underlying factors behind this growth. Based on a “modified gravity model,” we estimate U.S. exports of processed foods to 10 low and middle-income countries from 1980-2002 using fixed effects method. A classical linear regression model estimates U.S. exports to 60 low and middle-income countries. Results from the classical model indicate that population and income have a positive effect on the demand for processed foods by low and middle-income countries. As expected, exchange rates, tariffs and distance have an inverse relationship with U.S. exports. Empirical results from the fixed-effects model are similar, with the exception of population. The empirical results of this research imply that among emerging markets, middle-income countries that have open trade policies and are in relative close proximity to the U.S. offer better opportunities for U.S. exports of processed foods.

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