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Abstract
Agricultural economists and policy makers in the United States believe that the magnitude of the
export demand elasticity is one of the most important parameters used in farm policy decisions. However,
past empirical estimates show wide variation in the size of the U.S. export demand elasticity.
Reasons for this wide variation go beyond differences in model specification, estimation methods,
and period of estimation to involve factors such as trade policies and changes in the supply and demand
conditions of foreign countries. In view of the continual variation in magnitude, the elasticity
of export demand should be viewed as a variable rather than as a parameter. In this study, U.S. wheat
export demand elasticities are computed using a world wheat trade model. The estimates show that
the elasticities vary significantly over time. They also reveal that elimination of trade barriers would
more than double wheat export demand elasticities.