The decline of an export industry,or the growth of Peruvian sugar consumption in the long run

Growth of domestic consumption of agricultural exportables is a neglected aspect of LDCs’ long‐run primary export performance. Price and income elasticities of local demand for specific exportables vary with economic development, so the Peruvian sugar industry was chosen to illustrate how and why such changes occur. Elasticity estimates for different types of sugar are presented for several time periods between 1913 and 1978. A comparison of these results with those of other researchers suggests that aggregating raw, refined and plantation white sugar consumption may bias income elasticity estimates for refined sugar upwards, and price elasticity estimates downwards.