Graduate Thesis Or Dissertation
 

An inquiry into the import demand for fresh American fruit in Hong Kong

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  • West Coast fruit cooperatives working together in joint-venture trading companies may well lower the prices of their fruit for export through economies of scale. However, present and future foreign demand for American fruit may constrain any economies of scale that are realized in joint-venture agreements. The major objective of this thesis is to analyze the import demand for fresh American oranges, apples, and grapes of one important buying area, Hong Kong. Two theoretical constructs are used to model the import demand for American oranges, apples, and grapes in Hong Kong. One relies on more traditional assumptions of product homogeneity. The other utilizes the Strotzian utility tree. The resulting models are estimated using Ordinary Least Squares. Four conclusions may be drawn from the estimated models. First, Hong Kong consumers have very elastic responses to changes in the prices of American oranges, apples, and grapes relative to the prices of oranges, apples, and grapes from other sources. Second, this result is especially true when below average demand conditions prevail. Hence, lower prices realized through joint-venture trading companies increase the competitiveness of American fruit at these weaker times. Third, the per capita quantity demanded of American oranges, apples, and grapes will increase as the incomes of Hong Kong's inhabitants rise. Fourth, the statistical problems encountered in the larger models preclude any definite conclusions regarding the price effects of other fruit on the demand for American oranges, apples, and grapes or the price effects which the American fruit may have on each other.
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