Year: 2014
Type: dissertation
Abstract: Due to the complexity and dynamism of the global beef market, policymakers need a theoretically \nconsistent, rigorous and quantitative analysis to validate and quantify the effects of different factors \nthat are believed to drive beef trade. The general objective of this dissertation was to validate and \nquantify the factors that drive and influence international beef trade in order to facilitate and \nimprove the decision-making behaviour of policymakers. The gravity model methodology was \nidentified as the ideal framework to address the general objective of this dissertation, and was used \nas the primary tool to analyse the factors that drive and influence beef trade. The specific objectives \nwere to gain an understanding of prominent issues that influence international beef trade, to review \nthe gravity modelling methodology and to model the effects of various issues on the volume of beef \ntrade based on trade data among leading importers and exporters between 1996 and 2010. A model was estimated using two separate equations, referred to as Model B1 and Model B2. For \neach of these equations the dependant variable varied to represent: bovine cuts boneless, fresh or \nchilled (HS 020130); bovine cuts boneless, frozen (HS 020230); and an aggregation of these two \nproducts designated as "Total beef". Model B1 was estimated with the full gravity model \nspecification, including export prices. Since very few studies on commodity specific gravity \nmodels exist and have never modelled beef exports prices directly, it was decided to run an \nadditional model, Model B2, without the export price variable. The Wald Chi-square test \nconfirmed that the variables included in the model were significant in explaining the variation in the \nvolume of exports. Issues that were included in the specification included beef production in a beef \nexporter, beef consumption in a beef importer, tariff measures applied by importing countries, \nincome per capita of consumers in importing countries, export prices and trade bans due to animal \ndiseases. \nThe coefficients of individual variables estimated were found to be plausible while the signs of the \ncoefficients indicated the expected relationships between the volume of beef trade and each of the \nindividual issues. After comparing the two models it was found that the price variable exhibited \nstatistically significant and plausible results, and did not affect the estimates of the other variables. \nA comparison with similar studies revealed that the model developed in this dissertation estimated \nsimilar results in some areas, and even more plausible results in others. When all of the statistical \ntests and validation criteria are taken into account, the gravity model developed in this dissertation \nwas successful in validating and quantifying the factors that drive and influence international beef \ntrade.
Author: Nicholas Scheltema
Language: English
Topic: Global trade and economics
Domain: Social Sciences
SDG: Zero hunger
Open Access status: green
OpenAlex ID: W224644871