Home bias and U.S. imports of processed food products

This article estimates the degree of home bias for U.S. imported food products using an Armington model (Armington, 1969), and then assesses some of its determinants. Empirical results indicate that a very strong bias toward domestic products significantly limits foreign imports of the same type of products, and that without home bias, imports would increase several-fold. The degree of home bias is found to be higher in industries with co-location of raw agricultural production, delivery of mostly finished rather than intermediate food products, protection by high non-tariff barriers, and importation from neighboring countries (Mexico and Canada).