U.S. Mushroom Import Demand Estimation with Source Differentiated AIDS and Rotterdam Models

Advisor: Azzeddine Azzam While technically considered as fungi, mushrooms are often classified as vegetables because they provide many of the nutritional attributes of produce as well as meat, beans, and grains. The U.S. is the largest consumer of mushrooms and the share of imports in total consumption of mushrooms has been rising and will likely continue to The contribution of this thesis is to provide the first-ever estimates of import demand elasticities for fresh and canned mushrooms during the period of 2002-2015 by 1) first using a source-differentiated Almost Ideal Demand System (AIDS) model and a source-differentiated Rotterdam model; and 2) selecting between the two models based on two specification tests. Several findings and implications are in order. First, demand for Canadian fresh mushrooms is more inelastic than demand for Chinese canned mushrooms. This means that while Canada, the leading exporter of fresh mushrooms, may gain more revenue from rising mushroom prices; China, the leading exporter of canned mushrooms, may lose. Second, the expenditure elasticity of fresh mushroom imports from Canada is inelastic and the expenditure elasticity of canned mushroom imports from China is elastic. This means that Chinese exporters stand to gain more than Canadian exporters from rising U.S. spending on mushrooms.