A production theory application to modeling Korean beef import demand

Abstract

[ACCESS RESTRICTED TO THE UNIVERSITY OF MISSOURI AT REQUEST OF AUTHOR.] This research assesses the import demand for beef in the Korean market by source of origins including domestically produced beef. An indirect translog production function was specified. The results showed that the trade liberalization affected the import beef market in Korea. A test of whether the financial crisis in late 1997 impacted the import beef demand showed that the crisis affected the import beef demand. The BSE outbreak indicated an impact on the demand for beef had occurred. While the relationship between Australia and Korea showed a complementary relationship, the relationship between the U.S. and Australia and that of the U.S. and Korea indicated a mild substitution relationship. These results infer that the Korean beef market might have been in deficit supply. In addition, the study indicated that the Korean importers might have preferences toward U.S. beef, whose quality is close to that of Korean native beef because both are grain fed. Australia beef is preferred less than U.S. and Korean beef because of its different quality compared to U.S. beef and Korean domestic beef.