Degree

Doctor of Philosophy (PhD)

Department

Agricultural Economics And Agribusiness

Document Type

Dissertation

Abstract

The bell pepper is nearly a US$2.5 billion industry, from which the U.S. producers have less than a 40% market share, and have been losing market share continuously since 1998. This dissertation provides valuable information that could be used by stakeholders and policy-makers to help the industry or in the eventuality of a trade dispute. Several LA/IAIDS[1] and NL/IAIDS models are fitted to monthly data to calculate the substitution possibilities between the local and the imported bell pepper. Results show that the U.S. and Mexican bell peppers have higher substitution possibilities than the U.S. and ROW[2] bell peppers. However, consumers in the United States substitute more easily the locally produced bell pepper with the imported one. The substitution possibilities between the U.S. and Mexico bell pepper increase during winter-spring when U.S. production of bell pepper is out of season, U.S. consumption is the highest, and most of U.S. production is green bell pepper. The magnitude of substitution between the U.S. and ROW bell peppers are greater during summer-fall. However, the ROW bell pepper has low substitution across all seasons. The U.S. green bell pepper has greater substitutability than the U.S. colored bell pepper. The substitution of local colored bell pepper by other sources is nearly zero. According to the scale flexibilities, the latter is perceived as a luxury.

Furthermore, a novel approach is developed to evaluate the effect of consumption habits on the own- and cross-price flexibilities. Thus, the traditional NL-IAIDS model is augmented with own- and cross-consumption habits. Results showed that when specific consumption habits are factored in, the demand for bell pepper becomes more inflexible, and the substitution possibilities become larger than results from the static version and the dynamic model developed by Holt and Goodwin (1997).

[1] LA=Linearly-approximate, NL=Non-linear, IAIDS=Inverse Almost Ideal Demand System

[2] ROW=Bell pepper imported from the Rest of the World

Date

1-29-2018

Committee Chair

Kennedy, P. Lynn

Available for download on Monday, January 27, 2025

Share

COinS