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Abstract

Country of Origin Labeling (COOL) for meat products have been a debated subject since its implementation in March, 2009. While advocates of COOL suggest it provides valuable information to consumers, opponents on the other hand claim it imposes unnecessary cost on consumers and distort trade in affected commodities. This paper applies a Source Differentiated Almost Ideal Demand System to estimate mandatory COOL induced Structural Change in U.S. imported meat products. Included in the model is a system of equations setting consisting of beef, pork and lamb. The results show an elastic own price for beef from all countries except Canada. Pork from Canada, Denmark and Mexico; and lamb from Australia and New Zealand; has an inelastic own price. The initial impact of COOL resulted in a decline in the imports of the three meat products. Also, the Pre and Post COOL analyses show declined expenditures on all meat types from all the sources. The chow test performed indicates a structural change in all the meat types from all the sources with the exception of beef from Canada and Pork from Denmark. COOL appears to have had mixed effect on U.S. meat imports based on the source of origin of each meat type.

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