Analysis of the determinants of apparel imports and domestically produced apparel demand

The main objective of this research was the development of models to gain a better understanding of the domestic determinants of apparel import demand and domestically produced apparel demand. The objective included an analysis of the sectors which are affected by the relationships which exist in the domestic apparel environment. The sectors are: (1) consumers; (2) domestic producers; (3) domestic workers; (4) foreign producers; (5) foreign workers, and (6) apparel importers. Statistical models were developed to establish the deteminants of (1) imported apparel demand, (2) domestically produced apparel demand, (3) total apparel employment level, (4) level of apparel production workers employed, (5) domestic apparel inventory level, (6) capital stock, and (7) capacity utilization rate of the domestic apparel producer. Elasticities were obtained from the models. Interpretation of the elasticities stated the impact upon various sectors of the apparel industry.

Documented secondary sources provided the data. The time period investigated was 1962-1982. Each developed model was evaluated for estimation of fit and significance. The hypothesized relationship between the seven equation areas and independent variable sets were accepted.

One result of the study suggested price and quantity relationships for the imported good and the domestically produced item. The results indicated a negative relationship existed between the quantity of imports and the price level of imports. In other words, as the level of apparel imports increased, the price of the imported goods should decrease. This relationship is compared to the positive relationship which existed between domestic apparel price and domestic production levels. As the output level of the domestic good increased the price increased also. In summary, a high demand for apparel imports should cause the imported item to decrease in unit value as opposed to an increase in the unit value of the domestic good when an increase in demand results in an increase in the output level.