Saccharin from China - USITC

adjusting supply in response to price change during the 2003-06 period. During that period, the supplyelasticity would probably have been in the 5 to 10 range. However, in view of *** an elasticity isdifficult to estimate.U.S. Demand ElasticityThe U.S. demand elasticity for saccharin measures the sensitivity of the overall quantitydemanded to a change in the U.S. market price of saccharin. This estimate depends on factors discussedearlier such as the existence, availability, and commercial viability of substitute products, as well as thecomponent share of the saccharin in the production of any downstream products. Since substitutes forsaccharin are available in some applications, the aggregate demand for saccharin is likely to bemoderately elastic; a range of -1.0 to -1.5 is suggested.Substitution ElasticityThe elasticity of substitution depends upon the extent of product differentiation between thedomestic and imported saccharin from China. 8 Product differentiation, in turn, depends upon such factorsas quality and conditions of sale (availability, delivery, etc.). Based on available information indicatingthat the domestic and imported products from China can generally be used interchangeably, the elasticityof substitution between U.S.-produced saccharin and imported saccharin is likely to be in the range of3 to 5.8The substitution elasticity measures the responsiveness of the relative U.S. consumption levels of the subjectimports and the domestic like product to changes in their relative prices. This reflects how easily purchasers switchfrom the U.S. product to the subject imports (or vice versa) when prices change.II-8