| This research estimates price and expenditure elasticities of U.S. red wine imports from five countries--Italy, France, Spain, Australia, and Chile--which are compared to elasticities of domestically produced red wine using the first-difference version of the almost ideal demand system (AIDS). Expenditure elasticity results indicate that if U.S. total expenditures on red wine increase, domestic producers would gain most. Empirical results for conditional own-price elasticities of demand indicate that U.S. and Chilean red wines are elastic while U.S. demand for red wines from other countries are highly inelastic. Due to the magnitude of consumption of U.S. domestic red wines relative to imports, an increase in the price of U.S. wine results in a decline in... |
