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The European Market for ASEAN Agricultural Exports: Estimates of Income and Price Elasticities
- ASEAN Economic Bulletin
- ISEAS–Yusof Ishak Institute
- Volume 21, Number 3, December 2004
- pp. 261-277
- Article
- Additional Information
This article provides new evidence on income and price elasticities of demand for agricultural exports from ASEAN countries. Econometric models are constructed for seven agricultural commodities — cassava, cocoa, coconut oil, palm oil, pepper, rubber, and tea — exported from ASEAN to the EU. A modelling approach based on the error correction mechanism is used in order to emphasize the importance of the dynamics of trade functions. The results indicate that there is a relatively weak demand response to income and price changes in the EU. However, the results also suggest that relative-price variations affect significantly the demand for ASEAN commodity exports, implying that the exporter's market share is influenced by price competitiveness.