New Demand for Old Food: The U.S. Demand for Olive Oil

• Agricultural Economics Workshop

Date and Location

Tuesday, October 22, 2013, 12:10 PM - 1:30 PM
ARE Conference Room, 2102 Social Sciences and Humanities

Abstract

U.S. consumption of olive oil has tripled over the past twenty years, but nearly all olive oil continues to be imported. Estimation of demand parameters using monthly import data reveals that demand for non-virgin oil is income inelastic, but virgin oils have income elasticities above one. Moreover, demand for oils differentiated by origin and quality is price-elastic. These olive oils are highly substitutable with each other but not with other vegetable oils. News about the health and culinary benefits of olive oil and the spread of Mediterranean diet contribute significantly to the rising demand in the United States.

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