  By fully accounting for the distinct tariff regimes levied on imported meat,
we estimate substitution elasticities of Japan's two-stage import aggregation
functions for beef, chicken and pork. While the regression analysis crucially
depends on the price that consumers face, the post-tariff price of imported
meat depends not only on ad valorem duties but also on tariff rate quotas and
gate price system regimes. The effective tariff rate is consequently evaluated
by utilizing monthly transaction data. To address potential endogeneity
problems, we apply exchange rates that we believe to be independent of the
demand shocks for imported meat. The panel nature of the data allows us to
retrieve the first-stage aggregates via time dummy variables, free of demand
shocks, to be used as part of the explanatory variable and as an instrument in
the second-stage regression.
