Demand elasticities for Chilean apples in the European Union market: an econometric estimation

The European Union (EU) is one of the principal markets for Chileanapples (Malus domestica L.). In this study an econometricmodel of demand for imports of Chilean apples in the EU was examined.The Ordinary Least Squares (MCO) technique was used with annual datafrom 1984 to 2002 to estimate demand elasticities. The variables thatexplained the demand changes were determined to be per capita income(PIB) in the EU, the relative price difference between Chilean andChinese apples, the weighted average exchange rate variation in the EU,and a dichotomous special change variable. The value found for incomeelasticity of demand for imports was 0.913, relative price elasticity-0.368, and exchange rate elasticity -0.519. The main conclusion ofthis research suggests that demand for Chilean apple imports in the EUis inelastic relative to changes in income, relative price and exchangerate.