Effects and elasticities of import demand, domestic output and factors of production for U.S. textiles and apparel

The general purpose of this study was to develop and examine models to better understand the impacts of textile and apparel imports upon the determinants of textile and apparel import demand, upon the U.S. domestic textile and apparel production levels and upon the principle factors of the production in the U.S. domestic textile and apparel industries. A more specific objective was to estimate the elasticities of U.S. import demand for textiles and apparel, of U.S. domestic output of textiles and apparel, and of selected major production resources for U.S. domestic textile and apparel industries. The three types of models estimated for textiles and apparel were import demand models, output models and input demand models.

The data used in this study were monthly time series for the time period from January 1970 to September 1991. Most of the data were taken primarily from published secondary data, and some were collected from unpublished data provided by the United States Government agencies.

The level of imports demanded was hypothesized to be related to import price, domestic price, disposable personal income, and level of imports in previous time periods. The level of domestic output was supposed to be related to the level of total employment, capital utilization rate, domestic price, inventories, capacity and the level of imports. Each level of five selected factors (total employment, labor utilization rate, capital utilization rate, capital stock and inventories) of production was expressed as a function of each level of five selected factors of production, level of total products, ratio of factor prices, and time trend.

The estimated results were reasonable, statistically significant and economically meaningful for the most part. Therefore, the estimated elasticities in this study can help to better understand the effects of textile and apparel imports on the American consumer, producer, worker, industry and to some degree the United States economy.