A Study of Import Demand for Agricultural and Ginseng Products from China

Abstract

The aim of this study is to estimate the price elasticity of import demand for agricultural and ginseng products from China. The price elasticity of import demand for agricultural products from China was estimated to be -1.07 with a cross-price elasticity 0.44, and the income elasticity estimated to be 0.28. In the case of ginseng products, price elasticity was estimated to be -0.59 with a cross-price elasticity 0.16 and an income elasticity of 0.44. The results of the analysis showed that Chinese ginseng products were less sensitive to price changes as compared to the total agricultural products. In terms of income change, they were found to be more sensitive as compared to the total agricultural products. Because Chinese ginseng products are not greatly affected by price changes as compared to agricultural products, in which the damage amount would be limited even if a Korea-China FTA were to be concluded. Therefore, instead of focusing on imports defense, it is believed that the focus should be on expanding exports.