Abstract

RIVERA LOPEZ, Samuel; CAAMAL CAUICH, Ignacio; VALLE SANCHEZ, Manuel Del  and  PERALES SALVADOR, Arturo. Price elasticity of the orange supply in Mexico from 1991 to 2019. Acta univ [online]. 2021, vol.31, e3133.  Epub June 20, 2022. ISSN 2007-9621.  https://doi.org/10.15174/au.2021.3133.

The orange is the citrus with the highest production volume in Mexico. It is produced throughout the year, but with a marked seasonality in the harvest, which causes variations in the producer price. The objective of the research was to calculate the price elasticity of the fresh orange supply in Mexico from 1991 to 2019, aiming to estimate the influence of past prices on the volume of orange production in Mexico in the short run. A logarithmic regression was used in the formulation of the supply function model to directly know the value of elasticities. The results show that the orange supply in Mexico is inelastic with respect to the average rural price (ARP) with one, two, and three years of lag. The signs of the coefficients of the estimated parameters, since they are positive, agree with the economic theory of supply. It is concluded that the variations in the ARP with lag positively affect the volume of production of orange in Mexico in the short run.

Keywords : Supply function; average rural price; orange production; logarithmic model.

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