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Abstract

This study provides elasticity estimates of the Caribbean demand for U. S. and Rest-of-the-World starchy foods (unmilled wheat and flour, rice, corn and fresh potatoes) using the Restricted Source Differentiated Almost Ideal Demand System (RSDAIDS) model. Caribbean per capita import demand curves for U.S. and Rest-of-the-World (ROW) are own-price unitary elastic for U. S. wheat, and own-price inelastic for U.S. rice and ROW wheat and rice. The implication is that reductions by any means in U. S. or ROW export prices of wheat and rice will increase U.S. or ROW exported quantities in the Caribbean, while at the same time securing food security through import quantity in the Caribbean. Wheat is not produced in the Caribbean. U. S. wheat price policy oriented toward a reduction in the export price of wheat to the Caribbean may increase the U. S. wheat market share in the Caribbean. For wheat and rice, no competition across source exists. Instead, there exists a complementarity relationship across source for each of the two products. In other words, the Caribbean distinguishes between the wheat or rice coming from the U. S. and the wheat or rice coming from the Rest-of-the-World.

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