Cereal Import Demand in Developing Countries

The major determinants of cereal import demand in 7 4 less-developed countries (LDCs) were analysed using an econometric cross-sectional model. Key explanatory factors included the level of income and degree of urbanization, financial capacity proxies, and domestic grain supply variables. A major innovation involved the analysis of the impact of income distribution on LDC cereal import demand in 1986 and 1987 for a more restricted sample of 23 nations. These~ developing countries exhibit a greater than proportional increase in cereal imports due to an increase in the income share of the poorest 40 percent of their populations. The inclusion of regional slope and intercept dummies in the cereal import demand model also provides improved results. High levels of government debt appear to have inhibited cereal imports in nations in South America but not in Asia and Africa. In all three continental regions, particularly Africa, there is a positive relationship between food aid and cereal imports. The model predicts cereal imports more satisfactorily for nations in Asia and South America than for those in Africa. Finally, the results support the view that improvements in income distribution in developing nations would considerably stimulate cereal imports.

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 Record created 2017-04-01, last modified 2020-10-28

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